Texans Turning to Biodiesel, Thanks to Tax Credits and Willie Nelson

Washington DC July 5, 2005; The AIADA newsletter reported that The Wall St. Journal said that more people are filling their diesel tanks with blends that incorporate renewable sources -- known as biodiesel -- in the quest to keep their rigs rolling economically.

Though most manufacturers only allow warranties to stay in effect when drivers pump the 5% blend, known as B5, into their tanks, many are using the 20% grade -- B20 -- because it runs three to ten cents cheaper per gallon.

The article reports that "BioWillie" a branded fuel promoted by country singer Willie Nelson, is gaining customers, thanks to a recent concert Mr. Nelson held at a truck stop that sells the fuel, as well as billboards posted along Texas highways. About 450 station sell some blend of biodiesel in the U.S., and that number is expected to climb as the agriculutural company Cargill plans to build a biodiesel plant expected to turn out 37.5 million gallons of biodiesel annually -- more than the U.S. produced last year.

Last fall, Congress passed a law reducing the 24.4-cent-per-gallon federal excise tax on diesel fuel by one cent for every percentage point of farm-based biodiesel that was mixed in. (The credit for biodiesel made from reused oil: half a penny.) The cost of the 20% blend dropped by 20 cents a gallon.