Legislation Favorable to Biodiesel Producers

“We weren’t looking for the state to subsidize our production,” said Wootton, president of Keystone BioFuels Inc. in Shiremanstown and chairman of the Pennsylvania Biodiesel Producers Group. “We were looking for the state to level the playing field just enough to keep us in business.”

And that, Wootton said, is exactly what a bill that just passed the legislature does, reports The Sentinel.

The 75˘/gallon incentive for biodiesel manufactured and sold in the state, which will run for three years and is capped at $5 million dollars per year, will keep the fledgling businesses afloat long enough for another part of the governor’s energy package to kick in, Wootton said.

That second part, he explained, mandates that a year after in-state production of biodiesel from sources like soybeans, recycled yellow grease and rendered animal fats reaches 40 million gallons, diesel sold in the state must contain at least 2 percent biodiesel. “That basically creates a sustainable market,” Wootton said.

The bill mandates progressive percentages of biodiesel mix, jumping to 5 percent at 100 million gallons, 10 percent at 200 million gallons and 20 percent at 400 million gallons. It also mandates that cellulosic ethanol constitute at least 10 percent of gasoline sold in the state after in-state production of ethanol reaches 350 million gallons.

The industry came to Pennsylvania about two years ago in the form of seven businesses, he said, but with the other states’ incentives, “overnight our market went from very good when we started building here to very bad,” he said.

Six of the businesses are still hanging on, he said, and he expects the new legislation will attract more to Pennsylvania. He expects Pennsylvania biodiesel companies to hit the benchmark in a couple of years, he said, but that’s not as far as his planning goes.

“For every acre of soybeans, you get about 50 gallons of oil,” Wootton said. “For every acre of algae, you get about 1,500 gallons of oil.”

The algae-into-oil process is still in development, Wootton said, but he expects that to hit the market about five years from now. Meanwhile, he said, companies like his are actively seeking out used vegetable oil from restaurants to use in manufacturing the biodiesel.

View The Sentinel story by clicking here.

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