Government Support for Biodiesel

Thomas Leue ©2002 Thomas Leue

By any measure, biodiesel fuel is the new kid on the block, as far as the government is concerned. Other types of fuels gather generous government support, from an oil depletion allowance that pays for resource exploitation to the liability limitations that the nuclear industry enjoys.

Biodiesel is starting to make a visible presence nationwide, and expected production is growing quickly with some government support. For instance, the USDA will provide substantial support for biodiesel production growth, up to almost US$1.50 per gallon last year, but only for established companies. Startup ventures need not apply.

Other agencies may offer help with particular development issues. The Department of Energy offers some support for new ideas to increase the use of renewable energy, and may support biodiesel production facilities if development plans are presented well. Put on your thinking caps and stay tuned to the Internet sites that will advertise these opportunities.

On a state level, government support is mixed, apparently based on proximity to the large, established companies. At least seventeen states have passed legislation in one form or another promoting biodiesel. You can see a complete list at the National Biodiesel Board (NBB) Web site. Other states, like Massachusetts, believe that there is "very limited potential for commercial application."

Private organizations are more likely to fund biodiesel startup ventures than governments are. An attractive presentation, mostly based on free Internet information and a good business plan, can catch people's attention and may spark the interest of potential investors. Homestead, Inc. is trying to raise funds to disseminate information on this new technology for free. See our first efforts at

Bureaucratic Setback

Shortly before press time, the EPA decided that the existing health effects study for biodiesel was privately owned by a nonprofit organization, the National Biodiesel Board, and could not be used by biodiesel production facilities without NBB permission. The NBB is a membership organization, but current rules require financial commitments beyond the meager resources of a bootstrap company like Homestead, Inc.

The EPA has stated that Homestead, Inc.'s fuel is OK for our own use, and can be used in off-road machines like tractors. But on-road commercial use is subject to fines up to US$25,000 per day. Needless to say, we are reevaluating our production and marketing plans.

An appeal has been made to the EPA to reconsider these rules in the light of the government's general encouragement of clean energy technologies. When new information becomes available, we'll post an update in HP's Letters section.

proven most satisfactory. Diaphragm pumps are good if they are not too expensive. Pumps intended to transfer petroleum oils are also available.

Avoid rubber, butyl, or neoprene compounds, as well as any styrene plastics, since these may degrade in the presence of some of the biodiesel ingredients. Be sure any pipes or hoses do not react with methanol, lye, or methoxide.

Building a biodiesel factory, especially with used parts, requires hard work, experimentation, and ingenuity. Another option is to have a brand new biodiesel refinery built for you. Pacific Biodiesel offers such a service, but only for large-scale operations (2,500 to 20,000 liters; 600 to 5,000 gallons per day) and prices range from US$375,000 to US$1,500,000. Better to save your money and start looking at want ads and sales.

Fueling with a Conscience

So who buys from Homestead? Their customers are conscientious people; they buy biodiesel to reduce their part in global warming, air pollution, and habitat loss, and to improve ambient air quality on their farms. Several local families have purchased diesel vehicles just because this fuel has become available. (I might join them some day if I ever buy a car.)

Many people who buy biodiesel from Homestead use it in tractors, since the area has a good amount of agriculture. Biodiesel is amazing for tractors in a large part because of the health benefits—no more breathing toxic diesel fumes for hours. Besides, both state and local taxes must be paid on every gallon sold for road use, and the paperwork can be difficult to figure out.

Homestead has an increasing number of regular customers, and receives many calls each day. Individuals and groups come by to see the process, and Homestead attends conferences and festivals to promote biodiesel.

Biodiesel is a great transitional fuel, and providing it to people with diesel engines to decrease petroleum use is definitely a good service. The price is up to you. Unfortunately, a price representing biodiesel's true value doesn't compete with tax-subsidized, environmentally damaging, and artificially low-priced petroleum.

The first question people unfamiliar with biodiesel usually ask is, "How much is it?" and scoff if it's "too much." They forget that technology is a privilege, not a right. Motor vehicles, motorized equipment, motor boats, and engine generators impact the environment, no matter what fuel they run on.

A fuel like biodiesel minimizes ecological damage and makes a healthier environment, while using a resource that's usually wasted. Until the day comes when living low-tech locally is the norm, biodiesel can take you where you want to go. And right now, its availability depends on the initiative of small businesses like Homestead.


Emily Kolod, Smith College, Box 8293, Northampton, MA 01063 • [email protected]

Tom Leue, Homestead, Inc., 1664 Cape St., Williamsburg, MA 01096 • 800-285-4533 or 413-628-4533 • Fax: 413-628-3973 • [email protected]

From the Fryer to the Fuel Tank: The Complete Guide to Using Vegetable Oil as an Alternative Fuel, by Joshua Tickell, US$29.95 from BookMasters, PO Box 388, Ashland, OH 44805 • 800-266-5564 or 419-281-1802 [email protected]

National Biodiesel Board, 3337A Emerald Ln., Jefferson City, MO 65110 • 573-635-3893 •

Biodiesel discussion groups: Good reference sources:

Renewable Energy 101

Renewable Energy 101

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable. The usage of renewable energy sources is very important when considering the sustainability of the existing energy usage of the world. While there is currently an abundance of non-renewable energy sources, such as nuclear fuels, these energy sources are depleting. In addition to being a non-renewable supply, the non-renewable energy sources release emissions into the air, which has an adverse effect on the environment.

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