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|  | IRS Issues Tax Incentive Guidance |  |
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The IRS has published a guidance document related to the federal tax incentive for biodiesel. That document, IRS Notice 2005-04 on Excise Tax Provisions Added to Tax Code or Affected by American Jobs Creation Act, has been added to the NBB website. Click here to access the Notice.
The published Notice provides guidance that is general in nature and does not contain many specifics relative to the numerous questions that have been identified by industry.
The IRS is presently in the process of developing detailed guidance documents for several critical aspects of the incentive including producer registration and certification of feedstocks, among others. Members of the industry Ad Hoc Incentive Implementation Committee and National Biodiesel Board staff have been meeting with IRS and Department of Treasury staff and are working closely with them in the development of these detailed guidance documents. However, the IRS has indicated that these detailed guidance documents are still several months from completion.
IRS representatives will make presentations and answer question at the Ft. Lauderdale conference. The incentive will be available starting January 1st. However, the only guidance to date for industry members is the referenced Notice above. Entities that intend to distribute or blend biodiesel between now and the publication of the final guidance document are advised to proceed with caution and to take a vary narrow interpretation of the law. NBB staff and contractors are not excise or income tax advisors and therefore we recommend you seek the services of a qualified tax professional.
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| | Last Bulletin Until National Biodiesel Conference and Expo | |
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 This NBB Bulletin is the last one before the National Biodiesel Conference and Expo, which is Jan. 31-Feb. 2 in Ft. Lauderdale, Fla. (pre-conference events are Jan. 29 and 30).
Please register by January 17, if registering through the National Biodiesel Board office. Otherwise, register at the event. Registration is available at www.biodiesel.org/expo2005/. With expected attendance of over 700, make your plans now to join us, with events at the Ft. Lauderdale/Broward County Convention Center and the Marina Marriott.
The conference will offer 30 educational opportunities in the areas of technical, fuel distribution, policy/regulatory, marketing and user tracks. Some examples of seminars include the best practices of fleets using biodiesel, how the recently-passed biodiesel tax credit will affect you, and the highly-touted BQ-9000 fuel quality certification program offered by NBB. Representatives from the Internal Revenue Service will make presentations and be on hand to provide forms and answer questions about the tax incentive.
Other highlights include examples of opportunities independent of the track seminars such as biodiesel plant investment and biodiesel production technology. Industry networking will start - but not end - with the 2005 Biodiesel Golf Tournament and welcome reception. With over 50,000 square feet of exhibit space, the expo promises to bring you to the heart of the biodiesel industry action.
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| | Kansas Salt Mine is First to Use B100 Biodiesel | |
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 Air quality is a critical issue for workers who use diesel engines in confined spaces, and using biodiesel fuel in mining equipment is one way to help protect their health. The Kansas Soybean Commission (KSC), Hutchinson Salt Company and National Biodiesel Board (NBB) hosted a tour of the salt company’s mine in Hutchinson, Kan., Dec. 22. The Hutchinson Salt Co. is the first mine of any kind to use B100 (100 percent biodiesel).
Hutchinson Salt Co. began using biodiesel in June 2003, and used 31,229 gallons of B100 in the first year.
Mitch Holmes, Kansas state representative and Terry Bruce, Kansas state senator, were some of the dignitaries present at the tour. Other speakers included Jerry Wyse, the Kansas Soybean Commission Chairman; Harold Krause, NBB Director and soybean grower; Max Liby, VP of Manufacturing for the mine; Clark Duffy, Air and Radiation Director for Kansas Dept. of Health and Environment, Division of Environment; and Lee Spence, who is in charge of the mine’s underground vault storage. He said since the mine stopped using diesel fuel, storage clients have not complained of diesel soot on their stored items.
Reducing our dependence on foreign oil with biodiesel - the alternative fuel with the highest energy balance - was one message Wyse conveyed to the group.
“Hutchinson Salt Company is a leader and innovator in public health and safety,” said Duffy. “The groups represented here today need to make sure word gets out and promote alternative fuels in those areas where air quality standards are not being met,” he said.
Liby spoke to the significance this legislation would have to the Hutchinson mine, if 100 percent biodiesel is approved for the incentive. Currently it applies to blends. He said they want the credit to apply to them, but will continue to use biodiesel, and will be happy to use biodiesel, even if it does not. “The clean air is worth it,” he said.
More information on biodiesel in mines can be found at www.biodiesel.org/markets/min.
Please click here for the press release.
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| | EPA Rules that City of Bangor, ME, Use Biodiesel | |
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The EPA has ruled that the city of Bangor, Maine, convert its fleet to biodiesel, for violations ranging from improperly storing and disposing of hazardous wastes and waste water to a lack of properly trained personnel.
"All of us in Maine Clean Communities were very pleased that a solution to this situation could be worked out where funds regarding the penalty imposed by the EPA could be used for biodiesel fuel that will benefit the Bangor area,” said Peter Hefler, Maine Clean Cities Coalition Chairperson. “The ability to be able to convert the motor pool fleet to biodiesel will help clean the air in the Bangor area and that is a win for all.
“Biodiesel continues to grow in both use and importance in Maine. This unusual solution to a problem will aid in making all of us in Maine aware of the growing benefits of using biodiesel as a fuel that is environmentally friendly for all of us in Maine," Hefler said.
The city accumulated about $60,000 in fines for violations at four of its locations, and the fleet conversion costs should be around $165,000 to EPA’s specifications.
The Associated Press reported this story.
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| | School Districts Invited to Apply for Alt Fuel Grant | |
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The Clean Buses for Kids Program received 423 eligible Expressions of Interest by the November 12, 2004 deadline. Using a lottery, 62 school districts and other eligible entities were selected to apply to receive funding. Being invited to apply for funding is not a guarantee of funding. The program provides grants to school districts and other eligible public entities to purchase and install emission control equipment and to offset increased costs associated with using ultra low sulfur diesel (ULSD) fuel. Certified blends of up to 20% biodiesel with ULSD may qualify under certain circumstances. School districts selected may contact the Program Administrator for more information.
Applicants Invited to Apply For Funding (alphabetical)
Applicants Invited to Apply For Funding (by state)
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| | USDA Awards Grants to Biodiesel Projects | |
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The United States Department of Agriculture has announced recent grant recipients, and some include biodiesel. Following is a brief description of organizations receiving funding for biodiesel projects.
Value-Added Agricultural Product Market Development Grants Colorado Potato Administrative Committee will receive $41,375 to conduct a feasibility study to determine if converting an oilseed crop, such as canola, into biodiesel will be profitable.
Nebraska Soybean Association will receive $237,300 to evaluate the economic feasibility of processing soybeans and marketing biodiesel in Nebraska.
Oklahoma Farmers and Ranchers Energy Enterprise will receive $235,000 to determine the feasibility of marketing biodiesel, among other things.
Rural Cooperative Development Grants The Keystone Development Center of State College in Pennsylvania will receive funding to support the formation of 11 farmer alliances and cooperatives, including a cooperative for biodiesel production. (No dollar figures were available.)
Small Business Grants to Promote Innovative Research BioPlastic Polymers and Composites in Michigan will receive $40,000 for "Improved Quality Soy-oil Based Biodiesel Fuel."
Renewable Energy and Energy Efficiency Projects The following received funding under the Biomass/Bioenergy Technology category.
Blue Sun Biodiesel in Colorado - $500,000
Mid Atlantic Biodiesel Co. in Delaware - $500,000
Kendrick, Inc. in Iowa - $190,750
Lentz Construction in Iowa - $5,571
Co-op Plus of Western in Massachusetts - $249,694
Three S Enterprise in Mississippi - $256,850
Natchez Trace in Mississippi - $40,404
Cozad Alfalfa in Nebraska - $37,500
American Ag Fuels in Ohio - $500,000
Custom Fuels (Soy ENergy) in PA - $177,975
Wiese Brothers Partnership in WI - $470,500
Granite Valley Forest Products in WI - $176,938
R E Properties in Wisconsin - $29,950
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| | Four Biodiesel Projects Funded by EPA P3 Program | |
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Four biodiesel projects were given funding recently through the Environmental Protection Agency’s (EPA) People, Prosperity and the Planet (P3) program. They are at Oregon State University, Middlebury College, Oberlin College and Pennsylvania State University.
EPA says the P3 program is a partnership between the public and private sectors to achieve the mutual goals of economic prosperity while protecting the natural systems of the planet and providing a higher quality of life for its people. The P3 competition will provide grants to teams of college student to research, develop, and design sustainable solutions to environmental challenges.
The P3 Award Competition has two phases: Initially, teams compete for $10,000 grants. Recipients use the money to research and develop their projects during the academic year. Then in spring 2005, the P3 grant recipients will be invited to Washington, DC, to compete for the P3 Award, which conveys additional funding for further design development and implementation. The closing date for the 2nd annual P3 Award (Phase I) is January 27, 2005. EPA will fund approximately 50 student design projects from around the country during the 2005-2006 academic year.
Biodiesel Projects Approved for Funding - 2004-2005 Academic YearOregon State University: From Field to Fuel Tank: Exploring the Implementation of Biodiesel as a Sustainable Alternative to Petroleum Diesel in Oregon’s Willamette Valley
Middlebury College: Demonstrating the Feasibility of a Biofuel: Production and Use of Biodiesel from Waste Oil Feedstock and Bio-based Methanol at Middlebury College
Oberlin College: Community-Scale Biodiesel: An Affordable, Renewable Resource
Students there are proposing to build a community-scale, off-the-grid biodiesel processing facility.
Pennsylvania State University: Reduction of Use of Petroleum Energy Resources by Conversion of Waste Cooking Oils into Diesel Fuel (Phase I)
Phase 2 is to include engine performance and emission reduction studies and Phase 3 is to include commercialization of a self sustaining facility for some 200 pieces of campus equipment currently fueled with petroleum diesel fuel.
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| | Mid-Atlantic Lung Assoc. Leaders Respond Positively to Biodiesel Info. | |
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Top elected leaders and chief executive officers of lung associations from North Carolina, West Virginia, Virginia, Maryland and Delaware received a biodiesel presentation on December 2 while in Washington, D.C. for national lung association meetings. National Biodiesel Board (NBB), United Soybean Board’s Biodiesel Alliance Project and the Maryland Soybean Board are working with the American Lung Association of the District of Columbia (ALADC), which organized the meeting.
The lung association leaders asked many questions about biodiesel and how they could integrate it into their programs, as ALADC has done. The U.S. Department of Agriculture’s Beltsville Ag Research Center donated the use of its “bean bus” running on B20 biodiesel blend to transport the lung association leaders as they watched the American Environmental Review video on biodiesel that NBB completed with United Soybean Board support. NBB hosted the dinner. Maryland Soybean Board consultant Susanne Zilberfarb and Karen Edwards, who works on the Biodiesel Alliance Project, made the biodiesel presentation and will be able to provide state contacts with possible follow up opportunities with the lung association leaders.
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| | Public Transit in CO Gets Even Earth-Friendlier with Biodiesel | |
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 Since November the entire Roaring Fork Transportation Authority (RFTA) fleet has been using a small percentage of biodiesel. The RFTA is a transit and trails authority for several cities in Colorado, including Aspen.
RFTA buses are using a B5 blend (5 percent biodiesel/95 percent diesel) during a demonstration project. Given the number of miles and vehicles RFTA uses, starting out at B5 is a very significant step resulting in 30,000 gallons less oil-based diesel fuel consumed.
Biodiesel is a premium fuel and often costs more than regular diesel, so a citizen volunteer named Mike Lichtenfeld, Community Office of Resource Efficiency, and New Century Transportation Foundation joined together with RFTA to raise funds to remove cost as a barrier to using the renewable fuel.
So far the effort has raised enough funding for RFTA to use a B5 blend through late summer. Funding to date has been granted from Aspen Skiing Company (ASC) employees, through the Environment Foundation; Pitkin County Renewable Energy Mitigation Program; the State of Colorado Public Health Department; and private individuals.
“We’re pleased RFTA is taking the first step in using a renewable fuel and pleased to be able to support this project,” said Auden Schendler, Director of the ASC Environment Foundation. “We hope Environment Foundation funding this year will help drive a permanent switch to biodiesel in the future. I can’t think of a better holiday gift ASC employees could give to the Roaring Fork Valley.” Aspen Skiing Company has been using B20 biodiesel in all its snowcats since last year.
Click here to find out more, or to support the Roaring Fork Biodiesel Project.
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| | Upcoming Events | |
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- Advancing Biodiesel in Texas
Hosted by World Energy and the Houston-Galveston Area Council
Jan. 27, 2005
Austin
- 2005 National Biodiesel Conference & Expo
Jan. 30 – Feb. 2
Ft. Lauderdale, FL
www.biodiesel.org
- Clean Heavy-Duty Vehicles Conference 2005: Linking Energy Efficiency, Emissions and National Security
February 22-24, 2005
La Quinta Resort & Club, La Quinta, CA
www.calstart.org
- 27th Symposium on Biotechnology for Fuels and Chemicals
May 1-4, 2005, (Call for papers due Nov 30)
Denver, CO
www.eere.energy.gov/biomass/biotech_symposium
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