State biodiesel mandate to reach 20 percent by 2015
BREWSTER -- Gov. Tim Pawlenty signed legislation on Monday to increase Minnesota's biodiesel requirement from 2 percent to 20 percent by 2015. The measure was part of a larger bill that also included added benefits for veterans and their families.
Authored by Sen. Jim Vickerman, DFL-Tracy, and Rep. Al Juhnke, DFL-Willmar, the measure is praised by those in Minnesota's soybean industry. Representatives of both the Minnesota Soybean Growers Association and Minnesota Soybean Processors (MnSP) were on hand Monday to witness the governor's signature, including newly elected MnSP board president Jim Sallstrom of Winthrop.
"We're quite pleased," Sallstrom said of the legislation. "We feel that the increased requirement is a very good thing for the industry."
Juhnke called the legislation groundbreaking and said the state "once again asserts itself in a leadership role in biofuels across the country.
"What you will see is all eyes from every state in this union trained on Minnesota," Juhnke said, comparing the new biodiesel mandate to the state's ethanol mandate.
Minnesota introduced a 2 percent biodiesel mandate in August 2005 in conjunction with the opening of MnSP's 30-million-gallon soybean oil refinery. Two years later, before a crowd of hundreds at Farmfest in rural Redwood County, Pawlenty announced plans to increase the mandate, and over the course of the past two months, bills made their way through both the House and Senate.
Sallstrom said the legislation calls for a gradual increase in the biodiesel mandate, going from 2 percent to 5 percent by May 2009, and then climbing to 10 percent in 2012 before reaching 20 percent biofuel content in all diesel sold in the state by 2015.
"This bill, we feel, is going to be a benefit to consumers, farmers, truckers -- a whole host of people," Sallstrom said.
Several truckers were also on hand to see the legislation signed, he added.
"They're (truckers) enthusiastically supporting it," Sallstrom said. An increased level of biofuel in diesel is expected to lower the average price paid for diesel fuel in the state.
With the current 2 percent biodiesel mandate, approximately 16 million gallons of the soy-based product is used for blending each year in Minnesota. When the mandate increases to 5 percent in 2009, Sallstrom said 40 million gallons of biofuel will be needed, and 80 million gallons will be needed when the blended requirement reaches 10 percent in 2012.
At this time, Minnesota's biodiesel capacity is 64 million gallons, and biofuel not used within Minnesota is shipped out of state.
"In order to produce it in-state by 2012, there would need to be an additional plant to come on board," Sallstrom said. "If the economics are there, I think that will happen."
There are a couple of stipulations in the legislation, including that the blended requirement will cap at 5 percent during the winter months because of concerns of flowability with higher concentrations of biofuel. Also, a government-appointed board will regulate the biodiesel requirement.
"(The higher blends) are only in place if it's economically feasible to do," Sallstrom said. "If biodiesel is higher than diesel, the board can temporarily not have a biodiesel requirement."
MnSP in Brewster crushes soybeans for both oil and meal, netting approximately 48 pounds of meal and 12 pounds of oil from each bushel of soybeans delivered to the plant.
Sallstrom said only half of the oil produced at the Brewster facility is processed through the biodiesel refinery, with the remainder sold to other biodiesel plants or for food use.
"The governor pointed out today that biodiesel is beneficial to livestock," Sallstrom said. "More beans get crushed, more soybean meal is produced by the crushed plants ... and it has an effect of lowering the feed prices in the state."
State Capitol Reporter Scott Wente contributed to this report.