EU, US State on Biofuels | Green Energy News

June 8, 2003 – Vol.8 No.11

EU, US STATE ON BIOFUELS.

In a recent Directive from the European Union, the 15 member states are asked to develop methods by which a wide variety of biofuels will account for 2 percent of all transportation fuel sold by 2005 increasing to 5.75 percent by 2010. Working with industry, those nations will have until the end of 2004 to develop a strategy for meeting those targets as well as proving that they can make them law.

Specifically how they will meet this Directive is unknown, but the methods EU members may choose could be to create tax incentives for the sale of the fuels, or perhaps offer outright grants to build more biofuel production capacity.

Here in the U.S. two such methods designed to boost the sales of biodiesel have been signed into law. Governor Rod Blagojevich of Illinois has approved Illinois Senate Bill 46, which gives a partial sales tax exemption of 20 percent on blended biodiesel (from B1 to B10). The Governor has also signed House Bill 46 which creates the Illinois Renewable Fuels Development Program that will offer grants of up to $15 million annually for the construction, modification, alteration or retrofitting of renewable fuels production facilities with a minimum capacity of 30 million gallons per year.

The tax incentive - the slightly reduced cost of biodiesel - as well as the grant program, is expected to help expand the Illinois soybean market, thus help soybean farmers and ultimately the Illinois economy as a whole. With more soybeans (a feedstock for biodiesel) sold because of the anticipated increase in demand for biodiesel related to the sales tax reduction, along with the possibility of increased production capacity and the feedstock needed to support it, the demand for soybeans should increase the price by 5 cents per bushel. With 450 million bushels of Illinois soybeans sold each year, the small increase in price should add $22.5 million to the state’s economy.

The grants for new production capacity can also be applied to renewable fuels other than biodiesel. Visit the National Biodiesel Board at http://www.biodiesel.org/ ,the EU Directive through the European Union Law - Eurlex website at http://europa.eu.int/eur-lex/index.html ( (For English click Official Journal, Chronological Index, L123, click 42, other languages similar)