BioDiesel Fact Sheet -- Hampel Oil Distributors, Inc.

WHAT IS BIODIESEL

Biodiesel is the name for a variety of ester-based oxygenated fuels made from soybean oil or other vegetable oils or animal fats. The concept of using vegetable oil as a fuel dates back to 1895 when Dr. Rudolf Diesel developed the first diesel engine to run on vegetable oil. Diesel demonstrated his engine at the World Exhibition in Paris in 1900 using peanut oil as fuel.

Properties of Biodiesel

Today’s diesel engines require a clean-burning, stable fuel that performs well under a variety of operating conditions. Biodiesel is the only alternative fuel that can be used directly in any existing, unmodified diesel engine. Because it has similar properties to petroleum diesel fuel, biodiesel can be blended in any ratio with petroleum diesel fuel. Many federal and state fleet vehicles are already using biodiesel blends in their existing diesel engines.

The low emissions of biodiesel make it an ideal fuel for use in marine areas, national parks and forests, and heavily polluted cities. Biodiesel has many advantages as a transport fuel. For example, biodiesel can be produced from domestically grown oilseed plants such as soybeans. Producing biodiesel from soybeans and other domestic crops reduces the United States’ dependence on foreign petroleum, increases agricultural revenue, and creates jobs.

Key Advantages of Biodiesel:

1. Biodiesel is the only alternative fuel in the US to complete EPA Tier I Health Effects Testing under section 211(b) of the Clean Air Act, which provide the most thorough inventory of environmental and human health effects attributes that current technology will allow.

2. Biodiesel is the only alternative fuel that runs in any conventional, unmodified diesel engine. It can be stored anywhere that petroleum diesel fuel is stored.

3. Biodiesel can be used alone or mixed in any ratio with petroleum diesel fuel. The most common blend is a mix of 20% biodiesel with 80% petroleum diesel, or "B20."

4. The lifecycle production and use of biodiesel produces approximately 80% less carbon dioxide emissions, and almost 100% less sulfur dioxide. Combustion of biodiesel alone provides over a 90% reduction in total unburned hydrocarbons, and a 75-90% reduction in aromatic hydrocarbons. Biodiesel further provides significant reductions in particulates and carbon monoxide than petroleum diesel fuel. Biodiesel provides a slight increase or decrease in nitrogen oxides depending on engine family and testing procedures. Based on Ames Mutagenicity tests, biodiesel provides a 90% reduction in cancer risks.

5. Biodiesel is 11% oxygen by weight and contains no sulfur. The use of biodiesel can extend the life of diesel engines because it is more lubricating than petroleum diesel fuel, while fuel consumption, auto ignition, power output, and engine torque are relatively unaffected by biodiesel.

6. Biodiesel is safe to handle and transport because it is as biodegradable as sugar, 10 times less toxic than table salt, and has a high flashpoint of about 300 F compared to petroleum diesel fuel, which has a flash point of 125 F.

7. Biodiesel can be made from domestically produced, renewable oilseed crops such as soybeans.

8. Biodiesel is a proven fuel with over 30 million successful US road miles, and over 20 years of use in Europe.

9. When burned in a diesel engine, biodiesel replaces the exhaust odor of petroleum diesel with the pleasant smell of popcorn or french fries.

10. The Congressional Budget Office, and Department of Defense, US Department of Agriculture, and others have determined that biodiesel is the low cost alternative fuel option for fleets to meet requirements of the Energy Policy Act.

BIODIESEL IMPACT

An important factor that is not usually considered when calculating the costs and benefits of industrial feedstock materials is the macroeconomic effect associated with domestically produced, renewable energy sources. Economic benefits of a biodiesel industry in the US would include value added to the feedstock (oilseeds or animal fats), an increased number of manufacturing jobs, an increased tax base from plant operations and income taxes, investments in plant and equipment, improvement of our trade balance, and reductions in health care costs due to improved air quality and greenhouse gas mitigation.

Biodiesel has positive impacts on the state economy. An Iowa State University study concluded that three economic benefits would accrue to state from biodiesel. First, biodiesel expands demand for soybean oil, causing processors to pay more for soybeans, In addition, soybean farmers near the biodiesel plant would receive slightly higher prices for soybeans; and third, the presence of a facility that creates energy from soybeans would add value to the state's industrial and income base.

Dr. Hayes concluded that, "If the state of Iowa were to mandate the use of a 20 percent biodiesel blend in its state vehicle fleet where feasible, the total additional cost of this policy would range from $400,000 to $500,000. If it could be shown that this policy would result in a new five million gallon biodiesel plant in the state, then the policy would create more new tax revenues than it would cost and would clearly be in the best interest of the state."

Biodiesel has positive implications for production agriculture. A 1996 economic study published by the USDA Office of Energy predicted that a modest, sustained annual market for biodiesel of 100 million gallons in the US would contribute approximately seven cents to the price of each bushel of soybeans produced in the US. Based on last years harvested crop, the increase could have resulted in more than $168 million directly to the use of biodiesel.

Biodiesel has a positive impact on the US balance of trade.A 1998 biodiesel lifecycle study jointly sponsored by the US Department of Energy and the US Department of Agriculture concluded that increased use of biodiesel and biodiesel blended fuels such as B20 would substantially benefit our economy. The report concluded that national spending to import petroleum sends significant amounts of dollars out of our domestic economy every year. Biodiesel offers the potential to shift this spending from foreign imports to domestically produced energy. The report notes: "With its ability to be used directly in existing diesel engines, biodiesel offers the immediate potential to reduce our demand for petroleum in the transportation sector."

Biodiesel contributes jobs to the local economy. Economic work conducted at the University of Missouri estimated the benefits of producing biodiesel in a metropolitan region. This study concluded that 100 million gallons of biodiesel production could generate an estimated $8.34 million increase in personal income and over 6,000 additional temporary or permanent jobs for the metropolitan region.

BIODIESEL USAGE

Basic Terminology: Biodiesel is the pure, or 100 percent, biodiesel fuel.

It is referred to as B100 or "neat" fuel.

A biodiesel blend is pure biodiesel blended with petrodiesel. Biodiesel blends are referred to as Bxx. The xx indicates the amount of biodiesel the blend (i.e., a B20 blend is 20 percent biodiesel and 80 percent petrodiesel).

Ensure the neat biodiesel fuel meets the NBB biodiesel specification for pure biodiesel before blending with petrodiesel. The specification for biodiesel is designed to ensure that consumers will not experience operational problems from the fuel’s use. Make sure that biodiesel meets this specification and that the fuel supplier will warrant this fact. Quality fuel will provide the consumer with improved air quality and enhanced operability. Poor quality fuel will create operability problems and increased maintenance activity. Purchase only qualified fuel from a reputable source.

Check fuel filters on the vehicles and in the delivery system frequently upon initial biodiesel use and change them as necessary. Biodiesel and biodiesel blends have excellent solvent properties. In some cases the use of petrodiesel, especially #2 petrodiesel (has not been observed with #1), leaves a deposit in the bottom of fueling lines, tanks, and delivery systems over time. The use of biodiesel can dissolve this sediment and result in the need to change filters more frequently when first using biodiesel until the whole system has been cleaned of the deposits left by the petrodiesel. This same phenomenon has been observed when switching from #2 to #1 petrodiesel.

Be aware of biodiesel's freezing properties and take precautions as with #2 petrodiesel use in cold weather. A 20 percent blend of biodiesel with petrodiesel raises the freezing properties approximately 3° to 5° F (pour point, cloud point, cold filter plugging point). In most cases, this has not been an issue. Twenty percent biodiesel blends have been used in the upper Wisconsin area and in Iowa during -25° F weather with no problems. Solutions to biodiesel winter operability problems are the same solutions used with conventional #2 petrodiesel (use a pour point depressant, blend with #1diesel, use engine block or fuel filter heaters on the engine, store the vehicles near or in a building, etc.). Neat biodiesel will begin to freeze at about 25° F and, if used or stored on site, will need to be kept in an area that will not get below that temperature. Most underground tanks are around 50° F and are not a problem.

Wipe painted surfaces immediately when using biodiesel.As mentioned earlier, biodiesel is a good solvent. Biodiesel can, if left on a painted surface long enough, dissolve certain types of paints. Therefore it is recommended to wipe any biodiesel or biodiesel blend spills from painted surfaces immediately.

Store biodiesel or biodiesel blend soaked rags in a safety can to avoid spontaneous combustion. Biodiesel soaked rags should be stored in a safety can or dried individually to avoid the potential for spontaneous combustion. Biodiesel is made from vegetable oils and animal fats which can oxidize and degrade over time. The oxidizing process can produce heat. In certain environments, for example, a pile of oil soaked rags can become concentrated enough to result in a spontaneous fire.

Use the biodiesel within one year. All fuels, including #2 and #1 petrodiesel, have a shelf life. This is also true with biodiesel and biodiesel blends. Industry experts recommend that biodiesel be used within one year to ensure that the quality of the fuel is maintained. Storage time does not impact biodiesel distribution given biodiesel’s production logistics. Biodiesel is generally not stored for long periods of time. Production levels and rates are established to meet demand (similar to "just in time" inventory methods). This is an advantage enjoyed by renewable fuels, like biodiesel, that cannot be shared by its fossil fuel counterparts.

The National Biodiesel Board is available to answer additional questions regarding the transition to biodiesel fuel use.

Please do not hesitate to call and ask your questions. NBB can be reached at (800) 841-5849 or via e-mail at biodiesel@sockets.net.

EMISSIONS

Biodiesel is the first and only alternative fuel to have a complete evaluation of emission results and potential health effects submitted to the U.S. Environmental Protection Agency (EPA) under the Clean Air Act Section 211(b). These programs include the most stringent emissions testing protocols ever required by EPA for certification of fuels or fuel additives in the US. The data gathered through these tests complete the most thorough inventory of the environmental and human health effects attributes that current technology will allow. A survey of the results is provided in the table below.

BIODIESEL EMISSIONS COMPARED TO CONVENTIONAL DIESEL
Emission Type	B100	B20
Regulated
Total Unburned Hydrocarbons	-93%	-30%
Carbon Monoxide	-50%	-20%
Particulate Matter	-30%	-22%
NOx	+13%	+2%

Non-Regulated

Sulfates	-100%	-20%*
PAH (Polycyclic Aromatic Hydrocarbons)**	-80%	-13%
nPAH (nitrated PAH’s)**	-90%	-50%*******
Ozone potential of speciated HC	-50%	-10%
* Estimated from B100 result
** Average reduction across all compounds measured
*** 2-nitroflourine results were within test method variability

The overall ozone (smog) forming potential of biodiesel is less than diesel fuel. The ozone forming potential of the speciated hydrocarbon emissions was nearly 50 percent less than that measured for diesel fuel.

Sulfur emissions are essentially eliminated with pure biodiesel. The exhaust emissions of sulfur oxides and sulfates (major components of acid rain) from biodiesel were essentially eliminated compared to sulfur oxides and sulfates from diesel.

Criteria pollutants are reduced with biodiesel use. The use of biodiesel in an unmodified Cummins N14 diesel engine resulted in substantial reductions of unburned hydrocarbons, carbon monoxide, and particulate matter. Emissions of nitrogen oxides were slightly increased.

Carbon Monoxide -- The exhaust emissions of carbon monoxide (a poisonous gas) from biodiesel were 50 percent lower than carbon monoxide emissions from diesel.

Particulate Matter -- Breathing particulate has been shown to be a human health hazard. The exhaust emissions of particulate matter from biodiesel were 30 percent lower than overall particulate matter emissions from diesel.

Hydrocarbons -- The exhaust emissions of total hydrocarbons (a contributing factor in the localized formation of smog and ozone) were 93 percent lower for biodiesel than diesel fuel.

Nitrogen Oxides -- NOx emissions from biodiesel increase or decrease depending on the engine family and testing procedures. NOx emissions (a contributing factor in the localized formation of smog and ozone) from pure (100%) biodiesel increased in this test by 13 percent. However, biodiesel’s lack of sulfur allows the use of NOx control technologies that cannot be used with conventional diesel. So, biodiesel NOx emissions can be effectively managed and efficiently eliminated as a concern of the fuel’s use.

Biodiesel reduces the health risks associated with petroleum diesel. Biodiesel emissions showed decreased levels of PAH and nitrited PAH compounds which have been identified as potential cancer causing compounds. In the recent testing, PAH compounds were reduced by 75 to 85 percent, with the exception of benzo(a)anthracene, which was reduced by roughly 50 percent. Targeted nPAH compounds were also reduced dramatically with biodiesel fuel, with 2-nitrofluorene and 1-nitropyrene reduced by 90 percent, and the rest of the nPAH compounds reduced to only trace levels.

ENVIRONMENTAL & SAFETY INFORMATION

Acute Oral Toxicity/Rates	Biodiesel is nontoxic. The acute oral LD50 (lethal dose) is greater than 17.4 g/Kg body weight. By comparison, table salt (NaCL) is nearly 10 times more toxic.
Skin Irritation -Humans	A 24-hr. human patch test indicated that undiluted biodiesel produced very mild irritation. The irritation was less than the result produced by a 4 percent soap and water solution.
Aquatic Toxicity	A 96-hr. lethal concentration for bluegill of biodiesel grade methyl esters was greater than 1000 mg/L. Lethal concentrations at these levels are generally deemed "insignificant" according to NIOSH (National Institute for Occupational Safety and Health) guidelines in its Registry of the Toxic Effects of Chemical Substances.
Biodegradability	Biodiesel degrades about four times faster than petroleum diesel. Within 28 days, pure biodiesel degrades 85 to 88 percent in water. Dextrose (a test sugar used as the positive control when testing biodegradability) degraded at the same rate. Blending biodiesel with diesel fuel accelerates its biodegradability. For example, blends of 20 percent biodiesel and 80 percent diesel fuel degrade twice as fast as #2 diesel alone.
Flash Point	The flash point of a fuel is defined as the temperature at which it will ignite when exposed to a spark or flame. Biodiesel’s flash point is over 300° Fahrenheit, well above petroleum based diesel fuel’s flash point of around 125° Fahrenheit. Testing has shown the flash point of biodiesel blends increases as the percentage of biodiesel increases. Therefore, biodiesel and blends of biodiesel with petroleum diesel are safer to store, handle, and use than conventional diesel fuel.

FUEL DISPLACEMENT

Vehicles that operate on 20 percent blends of biodiesel blended with 80 percent conventional diesel (B20) will, on average, displace more than twice as much petroleum as conventional light-duty passenger vehicles already covered under the Energy Policy Act (EPACT).

Diesel engines used by medium and heavy duty government fleets consume significantly greater quantities of fuel than the light duty passenger vehicles that comprise the majority of the current EPACT fleets. The diesel engine vehicle portion of these fleets will be the primary market for B20.

The chart below illustrates the displacement potential of B20. All of the figures on vehicle miles traveled, miles per gallon, and total fuel usage are provided by the US Department of Energy’s Energy Information Administration publication: Alternatives to Traditional Transportation Fuels.

Vehicle/Fleet Type	VMT	MPG	Total Fuel Use	Percent (%) Petroleum Displaced by Alt. Fuel	Total Gallons Petroleum Displaced by Alt. Fuel
Light-Duty Passenger Vehicle (E85)	8000	24	334 Gal.	85%	283 Gal.
Light-Duty Truck (B20)	16400	16	1025 Gal.	20%	205 Gal.
Medium-Duty Truck (B20)	16400	8	2050 Gal.	20%	410 Gal.
Heavy-Duty Truck (B20)	16400	6	2734 Gal.	20%	547 Gal.
School Bus (B20)	8000	8	1000 Gal.	20%	200 Gal.
Transit Bus (B20)	33200	4	8300 Gal.	20%	1660 Gal.

VMT = Vehicle Miles Traveled MPG = Miles Per Gallon

As the chart shows, the key to total displacement is not the percentage blend level of the fuel, rather it is a function of the fuel blend level, fuel economy of the vehicles and the annual use of that vehicle by the fleet.

On average, B20 vehicles will displace more petroleum than existing light-duty EPACT passenger vehicles operating on higher blend levels because medium and heavy duty diesel engine vehicles consume substantially greater volumes of fuel than light-duty passenger vehicles.

PERFORMANCE

Successful alternative fuels fulfill environmental and energy security needs without sacrificing operating performance. Operationally, biodiesel performs very similar to low sulfur diesel in terms of power, torque, and fuel without major modification of engines or infrastructure.

Biodiesel offers similar power to diesel fuel. One of the major advantages of biodiesel is the fact that it can be used in existing engines and fuel injection equipment with little impact to operating performance. Biodiesel has a higher cetane number than U.S. diesel fuel. In over 15 million miles of in-field demonstrations biodiesel showed similar fuel consumption, horsepower, torque, and haulage rates as conventional diesel fuel.

Biodiesel provides significant lubricity improvement over petroleum diesel fuel. Lubricity results of biodiesel and petroleum diesel using industry test methods indicate that there is a marked improvement in lubricity when biodiesel is added to conventional diesel fuel. Even biodiesel levels below 1 percent can provide up to a 30 percent increase in lubricity.

Compatibility of biodiesel with engine components. In general, biodiesel will soften and degrade certain types of elastomers and natural rubber compounds over time. Using high percent blends can impact fuel system components (primarily fuel hoses and fuel pump seals), that contain elastomer compounds incompatible with biodiesel. Manufacturers recommend that natural or butyl rubbers not be allowed to come in contact with pure biodiesel. Biodiesel will lead to degradation of these materials over time, although the effect is lessened with biodiesel blends. If a fuel system does contain these materials and user’s wish to fuel with pure biodiesel, replacement with compatible elastomers is recommended. The recent switch to low sulfur diesel fuel has caused many OEMs to switch to components suitable for use with biodiesel, but users should contact their OEM for specific information.

Biodiesel in cold weather. Cold weather can cloud and even gel any diesel fuel, including biodiesel. Users of a 20 percent biodiesel blend will experience a decrease of the cold flow properties (cold filter plugging point, cloud point, pour point) of approximately 3 to 5° Fahrenheit. Precautions beyond those already employed for petroleum diesel are not needed for fueling with 20 percent blends. However, neat (100 percent) biodiesel will gell faster than petrodiesel in cold weather operations. Solutions for winter operability with biodiesel are much the same as that for low-sulfur #2 diesel (i.e., blending with #1 diesel, utilization of fuel heaters, and storage of the vehicle in or near a building).

PRODUCTION

The production of biodiesel, or alkyl esters, is well known. There are three basic routes to ester production from oils and fats:

Base catalyzed transesterification of the oil with alcohol.

Direct acid catalyzed esterification of the oil with methanol.

Conversion of the oil to fatty acids, and then to Alkyl esters with acid catalysis.

The majority of the alkyl esters produced today are done with the base catalyzed reaction because it is the most economic for several reasons:

Low temperature (150 F) and pressure (20 psi) processing.

High conversion (98%) with minimal side reactions and reaction time.

Direct conversion to methyl ester with no intermediate steps.

Exotic materials of construction are not necessary.

The general process is depicted below. A fat or oil is reacted with an alcohol, like methanol, in the presence of a catalyst to produce glycerine and methyl esters or biodiesel. The methanol is charged in excess to assist in quick conversion and recovered for reuse. The catalyst is usually sodium or potassium hydroxide which has already been mixed with the methanol.

QUESTIONS

What is Biodiesel?

Biodiesel is the name of a clean burning mono-alkyl ester-based oxygenated fuel. Biodiesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend. It can be used in compression-ignition (diesel) engines with no major modifications. Biodiesel is simple to use, biodegradable, nontoxic, and essentially free of sulfur and aromatics. Biodiesel is renewable and domestically produced from agricultural resources.

Is biodiesel used as a pure fuel or is it blended with petroleum diesel?

Biodiesel can be used as a pure fuel or blended with petroleum in any percentage. B20 (a blend of 20 percent by volume biodiesel with 80 percent by volume petroleum diesel) has demonstrated significant environmental benefits with a minimum increase in cost for fleet operations and other consumers.

Is it approved for use in the US?

Biodiesel is registered as a fuel and fuel additive with the Environmental Protection Agency (EPA) and meets clean diesel standards established by the California Air Resources Board (CARB). Neat (100 percent) biodiesel has been designated as an alternative fuel by the Department of Energy (DOE) and the US Department of Transportation (DOT).

How do biodiesel emissions compare to petroleum diesel?

The use of biodiesel in a conventional diesel engine results in substantial reduction of unburned hydrocarbons, carbon monoxide, and particulate matter compared to emissions from diesel fuel. In addition, the exhaust emissions of sulfur oxides and sulfates (major components of acid rain) from biodiesel are essentially eliminated compared to diesel.

Of the major exhaust pollutants, both unburned hydrocarbons and nitrogen oxides are ozone or smog forming precursors. The use of biodiesel results in a substantial reduction of unburned hydrocarbons. Emissions of nitrogen oxides are either slightly reduced or slightly increased depending on the duty cycle of the engine and testing methods used. Based on engine testing, using the most stringent emissions testing protocols required by EPA for certification of fuels or fuel additives in the US, the overall ozone forming potential of the speciated hydrocarbon emissions from biodiesel was nearly 50 percent less than that measured for diesel fuel.

Can biodiesel help mitigate "global warming"?

A 1998 biodiesel lifecycle study, jointly sponsored by the US Department of Energy and the US Department of Agriculture, concluded biodiesel reduces net CO² emissions by 78 percent compared to petroleum diesel. This is due to biodiesel’s closed carbon cycle. The CO² released into the atmosphere when biodiesel is burned is recycled by growing plants, which are later processed into fuel.

Is biodiesel safer than petroleum diesel?

Scientific research confirms that biodiesel exhaust has a less harmful impact on human health than petroleum diesel fuel. Biodiesel emissions have decreased levels of polycyclic aromatic hydrocarbons (PAH) and nitrited PAH compounds which have been identified as potential cancer causing compounds. In recent testing, PAH compounds were reduced by 75 to 85 percent, with the exception of benzo(a)anthracene, which was reduced by roughly 50 percent. Targeted nPAH compounds were also reduced dramatically with biodiesel fuel, with 2-nitrofluorene and 1-nitropyrene reduced by 90 percent, and the rest of the nPAH compounds reduced to only trace levels.

Does biodiesel cost more than other alternative fuels?

When reviewing the high costs associated with other alternative fuel systems, many fleet managers believe biodiesel is their least-cost-per-compliance mile option. Use of biodiesel does not require major engine modifications. That means operators keep their fleets, their spare parts inventories, their refueling stations and their skilled mechanics. The only thing that changes is air quality.

Do I need special storage facilities?

In general, the standard storage and handling procedures used for petroleum diesel can be used for biodiesel. The fuel should be stored in a clean, dry, dark environment. Acceptable storage tank materials include aluminum, steel, fluorinated polyethylene, fluorinated polypropylene and teflon. Copper, brass, lead, tin, and zinc should be avoided.

Can I use biodiesel in my existing diesel engine?

Biodiesel can be operated in any diesel engine with little or no modification to the engine or the fuel system. Biodiesel has a solvent effect which may release deposits accumulated on tank walls and pipes from previous diesel fuel storage. The release of deposits may clog filters initially and precautions should be taken. Ensure that only fuel meeting the biodiesel specification is used.

Where can I purchase biodiesel?

Biodiesel can be made available anywhere in the US. The National Biodiesel Board (NBB) maintains a list of registered fuel marketers.

Who can answer my questions about biodiesel?

The NBB maintains the largest library of biodiesel information in the US. Information can be requested by visiting the biodiesel web site at www.biodiesel.org, by emailing the NBB at info@nbb.org, or by calling NBB’s toll free number (800) 841-5849.

SPECIFICATION FOR BIODIESEL (B100)
as of May 1999

Biodiesel is defined as the mono alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, for use in compression-ignition (diesel) engines. This specification is for pure (100%) biodiesel prior to use or blending with diesel fuel.#

Property	ASTM Method	Limits	Units
Flash Point	D93	100.0 min.	Degrees C
Water & Sediment	D2709	0.050 max.	% vol.
Kinematic Viscosity, 40 C	D445	1.9 - 6.0	mm²/sec.
Sulfated Ash	D874	0.020 max.	% mass
Sulfur	D2622	0.05 max.	% mass
Copper Strip Corrosion	D130	No. 3 max.
Cetane	D613	40 min.
Cloud Point	D2500	Report to Customer	Degrees C
Carbon Residue 100% sample	D4530**	0.050 max.	% mass
Acid Number	D664	0.80 max.	mg KOH/gm
Free Glycerin	GC***	0.020 max.	% mass
Total Glycerin	GC***	0.240 max.	% mass

* To meet special operating conditions, modifications of individual limiting requirements may be agreed upon between purchaser, seller, and manufacturers.
** The carbon residue shall be run on the 100% sample.
*** Austrian (Christina Planc) update of USDA test method - See NBB for documentation.
# A considerable amount of experience exists in the US with a 20% blend of biodiesel with 80% diesel fuel (B20). Although biodiesel (B100) can be used, blends of over 20% biodiesel with diesel fuel should be evaluated on a case by case basis until further experience is available.

SAMPLE MATERIAL SAFETY DATA SHEET

1. CHEMICAL PRODUCT

General Product Name: Biodiesel
Synonyms: Methyl Soyate, Rapeseed Methyl Ester (RME), Methyl Tallowate
Product Description: Methyl esters from lipid sources
CAS Number: 67784-80-9

2. COMPOSITION/INFORMATION ON INGREDIENTS
This product contains no hazardous materials.

3. HAZARDS IDENTIFICATION

Potential Health Effects:

INHALATION:
Negligible unless heated to produce vapors. Vapors or finely misted materials may irritate the mucous membranes and cause irritation, dizziness, and nausea. Remove to fresh air.

EYE CONTACT:
May cause irritation. Irrigate eye with water for at least 15 to 20 minutes. Seek medical attention if symptoms persist.

SKIN CONTACT:
Prolonged or repeated contact is not likely to cause significant skin irritation. Material is sometimes encountered at elevated temperatures. Thermal burns are possible.

INGESTION:
No hazards anticipated from ingestion incidental to industrial exposure.

4. FIRST AID MEASURES

EYES:
Irrigate eyes with a heavy stream of water for at least 15 to 20 minutes.

SKIN:
Wash exposed areas of the body with soap and water.

INHALATION:
Remove from area of exposure, seek medical attention if symptoms persist.

INGESTION:
Give one or two glasses of water to drink. If gastro-intestinal symptoms develop, consult medical personnel. (Never give anything by mouth to an unconscious person.)

5. FIRE FIGHTING MEASURES

Flash Point (Method Used): 100.0° C min (ASTM 93)
Flammability Limits: None known

EXTINGUISHING MEDIA:
Dry chemical, foam, halon, CO2 , water spray (fog). Water stream may splash the burning liquid and spread fire.

SPECIAL FIRE FIGHTING PROCEDURES:
Use water spray to cool drums exposed to fire.

UNUSUAL FIRE AND EXPLOSION HAZARDS:
Oil soaked rags can cause spontaneous combustion if not handled properly. Before disposal, wash rags with soap and water and dry in well ventilated area. Firefighters should use self-contained breathing apparatus to avoid exposure to smoke and vapor.

6. ACCIDENTAL RELEASE MEASURES SPILL CLEAN-UP PROCEDURES

Remove sources of ignition, contain spill to smallest area possible. Stop leak if possible. Pick up small spills with absorbent materials such as paper towels, "Oil Dry", sand or dirt. Recover large spills for salvage or disposal. Wash hard surfaces with safety solvent or detergent to remove remaining oil film. Greasy nature will result in a slippery surface.

7. HANDLING AND STORAGE

Store in closed containers between 50° F and 120° F.
Keep away from oxidizing agents, excessive heat, and ignition sources.
Store and use in well ventilated areas.
Do not store or use near heat, spark, or flame, store out of sun.
Do not puncture, drag, or slide this container.
Drum is not a pressure vessel; never use pressure to empty.

8. EXPOSURE CONTROL /PERSONAL PROTECTION

RESPIRATORY PROTECTION:
If vapors or mists are generated, wear a NIOSH approved organic vapor/mist respirator.

PROTECTIVE CLOTHING:
Safety glasses, goggles, or face shield recommended to protect eyes from mists or splashing. PVC coated gloves recommended to prevent skin contact.

OTHER PROTECTIVE MEASURES:

Employees must practice good personal hygiene, washing exposed areas of skin several times daily and laundering contaminated clothing before re-use.

9. PHYSICAL AND CHEMICAL PROPERTIES

Boiling Point, 760 mm Hg:>200°C             Volatiles, % by Volume: <2
Specific Gravity (H2 O=1): 0.88                  Solubility in H2 O, % by Volume: insoluble
Vapor Pressure, mm Hg: <2                      Evaporation Rate, Butyl Acetate=1: <1
Vapor Density, Air=1:>1
Appearance and Odor: pale yellow liquid, mild odor

10. STABILITY AND REACTIVITY

GENERAL:
This product is stable and hazardous polymerization will not occur.

INCOMPATIBLE MATERIALS AND CONDITIONS TO AVOID:
Strong oxidizing agents

HAZARDOUS DECOMPOSITION PRODUCTS:
Combustion produces carbon monoxide, carbon dioxide along with thick smoke.

11. DISPOSAL CONSIDERATIONS

WASTE DISPOSAL:
Waste may be disposed of by a licensed waste disposal company. Contaminated absorbent material may be disposed of in an approved landfill. Follow local, state and federal disposal regulations.

12. TRANSPORT INFORMATION

UN HAZARD CLASS: N/A

NMFC (National Motor Freight Classification):
PROPER SHIPPING NAME: Fatty acid ester
IDENTIFICATION NUMBER: 144920
SHIPPING CLASSIFICATION: 65

13. REGULATORY INFORMATION

OSHA STATUS:
This product is not hazardous under the criteria of the Federal OSHA Hazard Communication Standard 29 CFR 1910.1200. However, thermal processing and decomposition fumes from this product may be hazardous as noted in Sections 2 and 3.

TSCA STATUS:
This product is listed on TSCA.

CERCLA (Comprehensive Response Compensation and Liability Act):
NOT reportable.

SARA TITLE III (Superfund Amendments and Reauthorization Act):
Section 312 Extremely Hazardous Substances:
None
Section 311/312 Hazard Categories:
Non-hazardous under Section 311/312
Section 313 Toxic Chemicals:
None

RCRA STATUS:
If discarded in its purchased form, this product would not be a hazardous waste either by listing or by characteristic. However, under RCRA, it is the responsibility of the product user to determine at the time of disposal, whether a material containing the product or derived from the product should be classified as a hazardous waste, (40 CFR 261.20-24)

CALIFORNIA PROPOSITION 65:
The following statement is made in order to comply with the California Safe Drinking Water and Toxic Enforcement Act of 1986. This product contains no chemicals known to the state of California to cause cancer.

14. OTHER INFORMATION

This information relates only to the specific material designated and may not be valid for such material used in combination with any other materials or in any other process. Such information is to the best of the company’s knowledge and believed accurate and reliable as of the date indicated. However, no representation, warranty or guarantee of any kind, express or implied, is made as to its accuracy, reliability or completeness and we assume no responsibility for any loss, damage or expense, direct or consequential, arising out of use. It is the user’s responsibility to satisfy himself as to the suitableness and completeness of such information for his own particular use.

Biodiesel; A Blending Component for Enhanced Fuel Lubricity in Diesel Fuel
Frequently Asked Questions

What is Biodiesel?

Biodiesel is a cleaner burning fuel for diesel engines, which is produced from renewable resources such as soybean oil.

Is biodiesel a legal fuel?

Biodiesel is legal for commerce in the United States. Biodiesel has been registered with the U.S. Environmental Protection Agency as a fuel and as a fuel additive and has complied with all health effects testing required by 211(b) of the Clean Air Act Amendments of 1990.

Have other alternative fuels conducted health effects testing?

To date, biodiesel is the only alternative fuel in the country to have accomplished this 3-year, $2.2 million testing regimen.

Is biodiesel exhaust less harmful than petroleum based diesel exhaust?

Biodiesel is safer for people to breathe. Research conducted in the United States showed biodiesel emissions have significantly decreased levels of all target polycyclic aromatic hydrocarbons (PAH) and nitrited PAH compounds, as compared to petroleum diesel exhaust. PAH and nPAH compounds have been identified as potential cancer causing compounds. Results of the subchronic inhalation testing showed no toxic results from biodiesel exhaust emissions-even at the highest concentrations physically possible to achieve. These results conclusively demonstrate biodiesel’s health and environmental benefits as a non-toxic, renewable fuel.

Can I use biodiesel in my existing diesel engine?

Biodiesel can be used as a pure product or blended at any percentage with petroleum diesel.B

How is biodiesel marketed today?

Beginning in November 1998 with the passage of the federal EPACT amendments which allowed biodiesel greater access to the alternative fuels market, biodiesel has become one of the fastest (if not the fastest) growing alternative fuel in the country. In addition, to being marketed as an alternative fuel technology to meet EPACT requirements, biodiesel has also seen widespread acceptance as a fuel lubricity additive in diesel fuel.

Where is biodiesel being used today as a fuel lubricity additive?

A total of seven companies have released premium additive packages containing biodiesel, in which biodiesel is a major marketing aspect of the products. In the summer of 1999, Koch - the second largest privately owned company in the US behind Cargill - launched a new premium diesel fuel product, US SoyField Diesel, which is now in over 20 terminals in the midwest and expanding. Also in 1999, Country Energy (the Farmland/Cenex petroleum joint venture) launched SoyMaster, their proprietary premium diesel containing biodiesel in four terminals in the Midwest.

Will biodiesel play a role in EPA's recent proposed regulation that limits sulfur content in diesel fuel?

In May, 2000, EPA proposed a reduction in the sulfur content of highway diesel fuel of over 95% from its current level of 500 ppm Biodiesel has no sulfur or aromatics and tests have documented it's ability to increase fuel lubricity significantly when blended with petroleum diesel fuel-even at very low levels. The currently proposed ultra-low sulfur diesel fuel regulations, designed to help protect human health, will require the addition of a lubricity additive. Biodiesel could be included as a low level blending component in diesel fuel as a means to improve fuel lubricity while providing environmental, economic, and energy security benefits to diesel users and the US public at the same time.

How much biodiesel would need to be added to provide sufficient fuel lubricity in diesel fuel?

Testing has confirmed that biodiesel can provide sufficient levels of fuel lubricity, even at blend levels below 1%, in current on-road diesel fuel. Testing is underway to determine specific blend levels that would be required in ultra-low sulfur diesel fuel (15 ppm).

If biodiesel was used in all of the on-road diesel fuel in the US, would the biodiesel industry be able to produce enough fuel to meet this demand?

If 1% biodiesel was blended with the national on-road diesel fuel pool, over 300 million gallons of biodiesel would be required. There are presently 13 companies who have invested millions of private dollars into the development of the biodiesel manufacturing plants and are actively marketing biodiesel. Based on existing dedicating biodiesel processing capacity and long-term production agreements, over 200 million gallons of biodiesel capacity currently exists. In addition, many dedicated biodiesel processing facilities are capable of doubling their production capacity within 18 months.

Are there any warranty implications associated with the use of biodiesel as a low level blending component in diesel fuel?

Biodiesel enjoys the support of the Fuel Injection Equipment industry as an option to solve the lubricity problem with petrodiesel. Stanadyne Automotive Corp., the leading independent US manufacturer of diesel fuel injection equipment, supports the inclusion of low levels of biodiesel in diesel fuel for two reasons. First, it would eliminate the inherent variability associated with the use of other additives and whether sufficient additive was used to make the fuel fully lubricious. Second, Stanadyne considers biodiesel a fuel or a fuel component – not an additive. It is possible to burn pure biodiesel in conventional diesel engines. Thus, if more biodiesel is added than required to increase lubricity, there will not be the adverse consequences that might be seen if other lubricity additives are dosed at too high a level.

Are there any adverse conditions that could arise if biodiesel were to be overdosed?

No, biodiesel can be used as a pure product or blended at any percentage with petroleum diesel. Fuel Injection Equipment manufacturers such as Stanadyne concur that there would be no adverse effects if more than the suggested rate was used.

What is the industry doing to ensure biodiesel quality?

in December 1998, the American Society of Testing and Materials (ASTM) issued a provisional specification (PS 121) for biodiesel fuel. ASTM is the premier standard-setting organization for fuels and additives in the U.S. The EPA has adopted the ASTM standard and state divisions of weights and measures currently are considering its adoption. This development was crucial in standardizing fuel quality for biodiesel in the U.S. market.

Can the lubricity benefits be gained through other sources?

Yes, replenishing the loss lubricity that will be apparent in future diesel fuel can be accomplished with conventional lubricity additives either on the market today or in the process of being formulated.

What is the cost of biodiesel compared to other petroleum based lubricity additives?

Economically, these products are the same or less expensive than biodiesel. Petroleum based additives, however, do not have the same conservation, energy security, environmental, and economic benefits. All of these factors need to be weighed fully.

If 300 million gallons of biodiesel were consumed next year, would there be any environmental or economic impacts to the US?

A 1998 biodiesel lifecycle study jointly sponsored by the U. S. Department of Energy and the U.S. Department of Agriculture concluded that increased use of biodiesel would substantially benefit our national economy. Inclusion of biodiesel, even at very low levels, would immediately incorporate domestically produced fuels as an immediate supplement to our nation’s current energy security programs at little or no cost to the taxpayer. Increased biodiesel production would result in significant economic benefits to state economies as well as agricultural producers. Increased use of biodiesel also results in significant environmental benefits.

The press has reported that for some alternative fuels it takes as much energy to process the fuel as the fuel contains. What is the energy balance of biodiesel?

For every one unit of energy needed to produce biodiesel, 3.24 units of energy are gained.

Is biodiesel safe?

Tests sponsored by the United States Department of Agriculture confirm that biodiesel is less toxic than petroleum diesel and biodegrades as fast as dextrose (a test sugar). In addition, biodiesel has a flash point of over 300° F which makes it safer to store and handle than petroleum diesel fuel.

Will burning biodiesel put more or less CO2 into the atmosphere?

A US study has found that biodiesel production and use, in comparison to petroleum diesel,
produces 78.5% less CO₂ emissions. Carbon dioxide is “taken up” by the annual production of crops such as soybeans and then released when vegetable oil based biodiesel is combusted.

How much will the sale of biodiesel affect the price paid to farmers for a bushel of soybeans?

With agricultural commodity prices at record low levels, and petroleum prices approaching record highs, it is clear more can be done to utilize domestic surpluses of renewable oils, such as soybean oil, while enhancing our energy security. A 1998 economic study conducted by the USDA Economic Research Service estimated that a sustained national market for 100 million gallons of biodiesel annually could increase the value of the US soybean crop by more than $250 million.

Biodiesel 2001
Indicators that the Biodiesel Industry is Growing and Poised to be a Significant Contributor to the U.S. Alternative Fuels Market

Recent achievement of three major long-term objectives. Because of the following 3 long-term achievements, biodiesel has become one of the fastest (if not the fastest) growing alternative fuels in the country.

Health Effects: In May 2000, biodiesel became the only alternative fuel in the country to have successfully completed the EPA’s Tier I and Tier II Health Effects testing under Section 211(b) of the Clean Air Act. The Tier I testing conclusively demonstrated biodiesel’s significant reductions in most currently regulated emissions as well as most unregulated emissions—especially those associated with cancer and lung disease. Tier II testing demonstrated biodiesel’s non-toxic effect on health.

EPACT: Effective November 1998, B20, a blend of 20% biodiesel and 80% petroleum diesel, was approved by Congress as an EPAct (Energy Policy Act of 1992) compliance strategy. The legislation allowed EPAct fleets to meet their alternative fuel vehicle purchase requirements simply by buying 450 gallons of pure biodiesel and burning it in new or existing diesel vehicles in at least a 20% blend with diesel fuel. The Congressional Budget Office and the Department of Defense have confirmed that the biodiesel option is the lowest cost alternative fuel option for meeting the federal government’s EPAct compliance requirements.

ASTM: In December 1998, the American Society of Testing and Materials (ASTM) issued a provisional specification (PS 121) for biodiesel fuel. ASTM is the premier standard-setting organization for fuels and additives in the U.S. The EPA has adopted the ASTM standard and state divisions of weights and measures currently are considering its adoption. This development was crucial in standardizing fuel quality for biodiesel in the U.S. market.

Current Industry Progress and Initiatives:

¨ Biodiesel Use Is Increasing Significantly. In January of 1999, there were very few fleets buying and using biodiesel. By January of 2001 there were well over 50 major fleets who had implemented biodiesel programs across the country including federal fleets such as US Postal Service, the US Air Force, the US Army, the US Department of Energy, the US General Services Administration, state fleets such as Ohio, Iowa, Virginia, Delaware, New Jersey, and major public utility fleets such as Commonwealth Edison, Duke Energy, Alabama Power and others.

¨ Ultra Low Sulfur Diesel. In January of 2001, the EPA finalized a rule that will require that sulfur levels in diesel fuel be reduced from 500 ppm to 15 ppm, a 97% reduction, by 2006. The EPA, the petroleum industry, and equipment manufacturers all recognized during the rulemaking process that the refinery changes necessary to meet this requirement will also dramatically reduce lubricity of the fuel. Lubricity is the characteristic in diesel fuel necessary to keep diesel fuel systems properly lubricated. Fuel that lacks lubricity can cause premature wear or malfunction. Biodiesel is uniquely positioned to address ultra low-sulfur diesel fuel because it has no sulfur and currently meets the 2006 standard. Moreover, biodiesel offers superior lubricity even in very low blends. For example, a 1% blend of biodiesel can improve lubricity by as much as 65%.

¨ Low Blend Premium Diesel Development: Since 1997, eight companies have released premium additive packages containing biodiesel as a lubricity additive. These products have had commercial success and demonstrated biodiesel’s effectiveness as a lubricity additive. For example, Koch Petroleum—the second largest privately owned company in the US behind Cargill-launched US SoyField Diesel, and has expanded into over 20 terminals in 7 states.

¨ Political and Public Support is Increasing Significantly: During the last 12 months, there has been a significant amount of increased political support for biodiesel. Biodiesel has been hampered compared to other alternative fuels because public policies supporting alternative fuels typically focused on vehicles and infrastructure. Because biodiesel is the only alternative fuel that is used in conventional diesel engines, it could not participate in those programs. Biodiesel is now included in major state and nationwide legislative efforts, which are providing a mechanism to quantify the benefits of the fuel and make it a cost-competitive option for achieving many national and statewide goals. Favorable biodiesel legislation is currently being considered in 9 states, including measures in Minnesota, North Dakota, and South Dakota to include 2% biodiesel in all diesel fuel sold in those states. Additionally, the US Congress is considering major biodiesel legislation to enhance national energy goals and to address the technical issues in ultra low-sulfur diesel fuel.

¨ Military: The National Biodiesel Board has entered into a Cooperative Research and Development Agreement (CRADA) with the Tank, Automotive and Armament Command (TACOM) of the U.S. Army to assist them in their effort to incorporate biodiesel into the procurement provisions for the military.

¨ All branches of the military have now committed to using biodiesel.

¨ The Defense Logistics Agency (DLA) is streamlining the biodiesel procurement process for both the military and individual federal agencies.

¨ The Department of Defense has issued guidance to all branches of the military for biodiesel use that is favorable to the purchase of the fuel.

¨ Biodiesel blends have been included in the 21^st Century Truck Initiative, being spearheaded by TACOM and the National Automotive Center as a leading alternative fuel for heavy-duty trucks because other alternatives to fossil fuels are not able to deliver the power and performance demanded by the heavy-duty sector.

¨ OEMs: Most major diesel engine manufacturers have affirmed that use of B20 in their equipment will not void their warranty and are actively working with industry on research and development activities. Moreover, the fuel injection equipment manufacturers have issued letters recognizing biodiesel’s significant role as a renewable lubricity additive. In fact, Stanadyne Automotive, Inc., the largest fuel injection equipment manufacturer in the US, submitted comments to the EPA’s low sulfur rulemaking process, which stated that biodiesel is a superior solution to lubricity loss in low and ultra low-sulfur diesel fuel because it eliminates the inherent variability of using additives. The comments stated that: a) lubricity testing has shown that up to 2% biodiesel is sufficient to make any distillate fuel fully lubricious, and b) since biodiesel is a fuel itself, there are no technical issues related to overdosing which are present with conventional lubricity additives.

¨ Future Market Dynamics Show Promise: As the EPA and fuel and equipment industry groups move to improve performance and emissions of diesel technology, it is clear that diesel will continue to be the preferred platform for heavy-duty applications for the foreseeable future. Furthermore, global warming and green house gases will continue to gain attention. Because biodiesel is compatible and complimentary to these goals and future technology, biodiesel is uniquely positioned to provide benefits in all these areas, which will further increase the fuel’s economic competitiveness. Biodiesel offers fleet managers an immediate and “seamless” ability to transform their diesel fleets into cleaner-burning alternative fuel fleets, without requiring any capital investment.

HEALTH EFFECTS TESTING

HISTORY

In June 2000, representatives of the U.S. Congress announced that biodiesel had become the first and only alternative fuel to have successfully completed the Tier I and Tier II Health Effects testing requirements of the Clean Air Act Amendments of 1990. The soybean industry invested more than two million dollars and four years into the health effects testing program with the goal of setting biodiesel apart from other alternative fuels and increasing consumer confidence in biodiesel.

TESTING

The first tier of health effects testing was conducted by Southwest Research Institute and involved a detailed analysis of biodiesel emissions. Tier II was conducted by Lovelace Respiratory Research Institute, where a 90-day sub-chronic inhalation study of biodiesel exhaust with specific health assessments was completed.

RESULTS

Results of the health effects testing concluded that biodiesel is non-toxic and biodegradable, posing no threat to human health. Also among the findings of biodiesel emissions compared to petroleum diesel emissions:

The overall ozone (smog) forming potential of exhaust emissions from biodiesel is 50% less.
The exhaust emissions of carbon monoxide (a poisonous gas and a contributing factor in the localized formation of smog and ozone) from biodiesel are 50% lower.
The exhaust emissions of particulate matter (recognized as a contributing factor in the respiratory disease) from biodiesel are 30% lower.
The exhaust emissions of sulfur oxides and sulfates (major components of acid rain) from biodiesel are complete eliminated.
The exhaust emissions of hydrocarbons (a contributing factor in the localized formation of smog and ozone) are 95% lower.
The exhaust emissions for aromatic compounds known as PAH and NPAH compounds (suspected of causing cancer) are substantially reduced for biodiesel compared to diesel. Most PAH compounds were reduced by 75% to 85%. All NPAH compounds were reduced by at least 90%.

SIGNIFICANCE

The health effects testing results provide conclusive scientific evidence using the most sophisticated technology available to validate the existing body of testing data. The comprehensive body of biodiesel data serves to demonstrate the significant benefits of biodiesel to the environment and to public health. This will lead to increase consumer confidence and increased use of biodiesel. Since the majority of biodiesel is made from soybean oil, a promising new market is materializing for soybeans.

NATIONAL ECONOMIC IMPACTS FROM INCREASED BIODIESEL USAGE

A 1998 biodiesel lifeyclcle study jointly sponsored by the U.S. Department of Energy and the U.S. Department of Agriculture concluded that increased use of biodiesel would benefit our national economy. Increased biodiesel production would also result in significant economic benefits to state economies as well as agricultural producers.

· According to economic modeling conducted by the Food and Agricultural Policy Research Institute, (FAPRI), 70 million gallons of annual demand for biodiesel could add $0.10 to $0.18 per bushel to the price of soybeans.

· An analysis conducted by the USDA Economic Economic Research Service estimates that 100 million gallons of biodiesel demand would increase soybean oil prices by 14%.

· USDA forecasts that ending stocks of soybean oil in 2000-01 will be 1.85 billion pounds. Soybean meal demand is forecasted to increase more than soybean oil demand.

· Oilseed industry experts estimate an additional four billion gallons of biodiesel feedstock supply could be available through expanded soybean acreage, increased utilization of oilseed crops and higher oil soybeans.

· Under current economic conditions, increased in soybean prices will result in decreased federal outlays under the soybean marketing loan program.

The utilization of biodiesel could have immediate impacts on the economy that would increase increased farm income, increased economic activity and corresponding increases to the local tax base, utilization of surplus soybean oil, and decreased federal outlays under the soybean marketing loan program. However, the biodiesel industry is currently not eligible for policy incentives enjoyed by other segments of the fuels market that would increase biodiesel sales and further market development.

· Until the early 1970's, the US was self sufficient in crude oil production. However, imports of crude have been increasing at an accelerating rate due to decreasing domestic production and increasing energy needs. Petroleum imports now account for more than half of our total usage, and make up the single largest component of our trade deficit.

· A 2000 GAO report documented specific petroleum tax incentives that range from about $330 million for the expensing of tertiary injectants (1980-2000) to about $82 billion for certain cost depletion deductions (1968-2000).

· The same GAO report indicated that ethanol fuel tax incentives ranged from $198 million for alcohol fuel tax credits (1980-2000) to about $11 billion for the excise tax exemption for alcohol fuels (1979-2000).

Although the tax incentives provided to the ethanol industry are a fraction of those provided to the petroleum industry, ethanol's favorable tax treatment has been critical in the development of ethanol into a two billion gallon per year industry. To date, the biodiesel industry has never received any favorable tax or subsidy treatment, and is at a significant disadvantage relative to petroleum. In fact, the US Congress is currently considering legislation that would provide further incentives to domestically produced petroleum, but would not apply to domestically produced biodiesel. Inclusion of biodiesel into a comprehensive energy policy that promotes domestically produced renewable fuels could have a significant impact on the development of the biodiesel market, at a relatively low cost to US consumers or taxpayers.

Policy options such as a national renewable standard for diesel fuel would provide significant benefits to the economy. In May 2000, EPA proposed a limit on sulfur of 15 ppm maximum for on-highway diesel fuel by 2007. This is a reduction of over 95% from the current limit of 500 ppm. Removing the sulfur from diesel fuel will reduce fuel lubricity, harming engine life. Biodiesel improves lubricity at very low percentages. Biodiesel could be included as a low level blending component in diesel fuel as a means to improve fuel lubricity while meeting other policy objectives. The Energy Information Administration reports that the total US distillate market in 1998 was over 55 billion gallons and 'on-highway' represented the largest component of this use at over 30 billion gallons.

· Inclusion of biodiesel in on-road diesel fuel at a level of 1% for lubricity purposes would result in the following:

300 million gallons of biodiesel demand.
Utilization of the oil from more than 214 million bushels of soybeans (over 2.2 billion pounds of soybean oil).
Add a minimum of 30¢ to the value of a bushel of soybeans, based on economic analyses conducted by USDA-ERS and FAPRI.
Add more than $800 million to gross farm income and decrease federal outlays under the soybean marketing loan program in similar amounts.
Potentially reduce fleet operating costs through increased equipment life.

The biodiesel industry is currently reviewing policy options such as tax incentives, relief of EPACT credit restrictions, as well as the inclusion of biodiesel in the national diesel fuel pool that would further the development of the biodiesel market, level the playing field in the alternative fuels marketplace, and lead to national economic benefits.

Economic activity from an activity from an industry can be categorized into direct, indirect, and induced impacts. Direct impacts are those changes in output or income that can be directly attributed to the industry. Secondary impacts (indirect and induced) result from subsequent rounds of spending and re-spending by consumers and businesses. The National Biodiesel Board will conduct a macroeconomic study in spring 2001 to quantify direct and secondary economic impacts, employment, balance of trade, and increased level of economic activity and corresponding state and local tax revenue that result from increased biodiesel usage.

Biodiesel 2001 Indicators that the Biodiesel Industry is Growing and Poised to be a Significant Contributor to the U.S. Alternative Fuels Market

Biodiesel 2001
Indicators that the Biodiesel Industry is Growing and Poised to be a Significant Contributor to the U.S. Alternative Fuels Market