August 21, 2010

Privtate Biodiesel Plants Close, Public Biodiesel Plant Opens

News items from the past couple of weeks paint a bleak picture for the biodiesel industry.

Vt. biodiesel plant closes, victim of federal decision not to renew tax credits - August 21, 2010

The Biocardel facility, in a former Agway plant in Swanton, was slated to eventually produce as much as eight million gallons of biodiesel a year. The now-expired federal tax credit effectively gave companies $1 a gallon in tax breaks to make the production of the alternative fuel – made from soybean oil, waste cooking oil or other vegetable oils – economically viable.

The Biocardel facility began limited production last fall, made about seven trucks which each hold 6,000 gallons overall, Daigle said. For logistical reasons that fuel was apparently all sold outside Vermont. In December the firm, which employed three, began hiring to expand its operation.

However uncertainty about the fate of the tax credits prompted a delay, which proved prudent once the credits expired. The firm tried to wait out the problem – hoping for a return of the credits – but investors simply ran out of money and after working with Biocardel, VEDA began recalling the loans a few weeks ago, he said.

The timing of the end of the federal tax credits, effectively a third of the company’s revenue, “could not have been any worse,” Daigle said. “We have done everything we could to try and keep the plant alive.”

This follows the news last week that Best BioDiesel was closing.

Best BioDiesel Cashton plant shuts down - Aug. 11, 2010

Best BioDiesel Cashton LLC, a subsidiary of Madison, Wis.-based Best Energies Inc., shut down operations at its 8 MMgy facility in Cashton, Wis., citing the lapse of the federal blender tax credit as the determining factor behind the decision.

We have known for some time that the biodiesel industry is struggling to survive. As I pointed out earlier, it is estimated that roughly half of the 50,000 U.S. jobs directly associated in biodiesel production have been lost the past two years.

But there are some biodiesel plants that are opening or expanding their operations. The problem is they are all public entities.

Alabama’s newest plant opens in Enterprise - Aug. 16, 2010

Employees at the Enterprise, Ala., Public Works Facility can add a new duty to their job descriptions: biodiesel production. After 15 years of development, the city officially announced its new biodiesel facility is up and running, with major supporter Gov. Bob Riley in attendance.

The city fueling station, which provides fuel for 85 city diesel fleet vehicles, six mental health and seven rescue squad diesels, will now carry B20 for those same vehicles.

Dallas residents can recycle used cooking oil at new station at Richland College - August 16, 2010

Dallas Water Utilities (DWU) and the Dallas County Community College District (DCCCD) today announced the installation of a cooking grease and oil recycling station at Richland College in northeast Dallas, the second recycling station installed on a DCCCD campus this year. A recycling station was installed at Mountain View College in southwest Dallas earlier this summer.

The Dallas County Independent School District, which operates school buses for Dallas and other school districts in the county, picks up the used cooking oil for conversion into and converts it to biodiesel.

I hope this isn't a growing trend where we see government entities producing biodiesel instead of supporting nearby businesses already involved in the industry. In the case of the Enterprise, AL project, there is a 10 million gallon per year biodiesel plant within 100 miles in southwest Georgia. There are also several biodiesel plants located in Alabama. Yet even with a nearby supply they didn't run their city vehicles on biodiesel till their own plant opened.

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