Automaker, RFS2 and Bus Fleet Commit to Biodiesel

• By L.K. Williams, EPonline
• Feb 11, 2010

Despite last year's disappearing tax credit and lack of regulatory support, the first general session of the 2010 National Biodiesel Conference & Expo commanded a healthy number of stakeholders (about 1,400 registered participants) hoping to hear some good news. And they did.

Attendees at the Feb. 8-10 conference saw

• General Motors announce that its Chevy Silverado and GMC Sierra heavy duty pickup trucks will have 20 percent biodiesel (B20) capability for model year 2011;
• U.S. Environmental Protection Agency officials brief attendees on the recently introduced final Renewable Fuels Standard 2 rule;
• Enterprise Holdings announce plans for its 600 airport shuttle buses in 50 North American markets to begin using at least 5 percent biodiesel (B5).

The conference, held in Grapevine, Texas, was organized by the National Biodiesel Board (NBB), the trade association representing the biodiesel industry as the coordinating body for research and development in the United States. Its membership is composed of state, national, and international feedstock and feedstock processor organizations, biodiesel suppliers, fuel marketers and distributors, and technology providers.

According to Joe Jobe, NBB chief executive officer, GM's announcement made a trifecta for the industry's technical program. Now, all three automakers are supporting the use of up to B20 fuel in some of their vehicles (Chrysler made the commitment in 2007, Ford with its pickup trucks in the fall of 2009, and now GM)." He noted that New Holland's equipment supports up to B100.

Representatives from EPA said that in 2010, 1.15 billion gallons of biodiesel will be required to be entered into commerce, further advancing the role of biodiesel in diversifying the nation’s energy portfolio, Jobe said, adding that “biodiesel has the best energy balance and the best greenhouse gas reduction of any fuel that is currently in the commercial marketplace and is the only advanced biofuel that has reached commercialization in the United States." The RFS2 rule is provided for in the Energy Independence and Security Act of 2007 and requires a fuel to lower greenhouse gas emissions by 50 percent (compared to petroleum diesel fuel) to qualify as a biomass-based diesel.

Enterprise Holdings is immediately converting buses in the markets where B20 is readily available: Boston, Chicago, Denver, Detroit, Los Angeles, Miami, Raleigh/Durham, San Antonio, and San Diego. The company is taking a phased approach, expecting the convert its bus fleet in the next five years. “This investment in biodiesel follows our commitment to our customers and our business to use our fleet to help grow the clean fuel market. By embracing alternative fuels and engine technologies, they have a greater opportunity to become commercially viable,” said Lee Broughton, director of corporate identity and sustainability for Enterprise Holdings.

In his opening remarks, Jobe said that the industry had no tax credit or RFS2 over the last 39 days. "It's like a train wreck in slow motion," but he added that Senators Chuck Grassley (R-Iowa) and Max Baucus (D-Mont.) are making a tax credit extender package a top priority and shared the possibility that the extension may be included in a bipartisan jobs package. NBB believes the tax incentive dramatically increased production of biodiesel. In 2004, before the credit was enacted, the industry produced 25 million gallons, which contrasts with 700 million gallons in 2008. Production in 2009 was down to 475 million gallons, and since the tax credit expired on Dec. 31, 2009, biodiesel is not price competitive with petroleum diesel which has led to employee layoffs.

Jobe noted that EPA's final RFS2 rule, just published on Feb. 3, was "good for biodiesel." It includes a majority of the feedstocks into the fuel supply this calendar year. NBB said many of its concerns of the proposed rule had been addressed in the final rule but the group still objects to the use of international indirect land use change in the agency's greenhouse gas methodology.

While some of last year's setbacks have members of the industry wondering if their strategy should be changed, Jobe disagreed. "We're not doing anything wrong. The wheels of Congress turn slowly. We need to keep a consistent, united message to Congress," he concluded.