ADM and Volkswagen Celebrate National Ag Day With Landmark Biodiesel Announcement
Extension of warranty coverage on B5 engines in US benefits farmers and the environment
WASHINGTON, March 17 -- Archer Daniels Midland Company (ADM) and Volkswagen AG announced today a landmark decision by Volkswagen to extend warranty protection for the use of biodiesel blend fuel in all of its US market diesel powered automobiles. This announcement represents the first major initiative to emerge from the Joint Research Agreement on Biodiesel established by the two companies last year.
The warranty protection, which covers biodiesel blends of up to 5% (B5), marks a significant milestone in the development of a national market for biofuels. Biodiesel, already a popular alternative fuel, is seen by Volkswagen as a key element of a long range fuel strategy that relies on efficient, clean diesel technology for the use of an increasingly broad portfolio of renewable fuels.
"Our decision to extend warranty coverage for diesel engines fueled by the B5 biodiesel blend is driven by the shared desire of VW and ADM to capitalize on the significant environmental, economic and quality-related benefits of increased biodiesel usage," said Frank Witter, CEO of Volkswagen of America. Witter added that, "Volkswagen and ADM are now focused on jointly testing a blend of 20% biodiesel or B20 in order to provide ever-cleaner alternative and sustainable fuel choices."
Mr. G. Allen Andreas, Chairman and Chief Executive of ADM said, "Today's decision demonstrates our serious commitment to acting as a trusted partner for America's farmers by creating new markets for agricultural products around the world. We believe that our actions today will not only result in increased usage of B5 biodiesel and greater demand for soy crops, but will also benefit the environment as a whole and highlight the key role that farmers can play in addressing global energy needs and environmental challenges."
Volkswagen's commitment to B5 comes after a year of extensive testing and development in cooperation with ADM, and discussions with the biodiesel industry about technical specifications required for the fuel to be compatible with current and future diesel technology. The successful test program together with industry commitments regarding technical fuel specifications allow Volkswagen to make an important commitment to accept B5 in the US as it has in Europe for many years.
Volkswagen and ADM will continue to work together to develop and demonstrate the advantages of biodiesel blends. The Companies have also undertaken testing and analysis regarding B20, a blend of 20% biodiesel and normal diesel fuel, with a plan to address policies toward that in the future.
Biodiesel is a fuel made from natural and renewable resources such as soybean oil. The use of clean burning biodiesel, which can power conventional diesel engines, is environmentally friendly and substantially reduces emissions of unburned hydrocarbons, carbon monoxide and particulate matter. As an alternative and renewable fuel, biodiesel can also reduce overall global dependence on fossil fuels. When made from plant-based feedstocks such as soybeans, biodiesel directly offsets net emissions of CO2, helping to reduce greenhouse gas emissions.
Archer Daniels Midland Company (ADM) is a world leader in agricultural processing. ADM is one of the world's largest processors of soybeans, corn, wheat and cocoa. ADM is also a leader in the production of soy meal and oil, ethanol, corn sweeteners and flour. In addition, ADM produces value-added food and feed ingredients. Headquartered in Decatur, Illinois, ADM has over 26,000 employees, more than 250 processing plants and net sales for the fiscal year ended June 30, 2004 of $36.2 billion. Additional information can be found on ADM's Web site at http://www.admworld.com/.
Headquartered in Wolfsburg, Germany, Volkswagen AG is one of the world's largest producers of passenger cars and Europe's largest automaker. Volkswagen AG employs over 300,000 people worldwide and had total sales in excess of €88 billion for 2004. Founded in 1955, Volkswagen of America, Inc. is headquartered in Auburn Hills, Michigan and is a subsidiary of Volkswagen AG. Volkswagen of America and its affiliates employ approximately 3,000 people in the United States and are responsible for the sale and service of Audi, Bentley, and Volkswagen products through retail networks comprising in total more than 900 independent U.S. dealers.