17 October 1998

On October 15, the US Senate and House passed legislation that alters the Energy Policy Act of 1992 (EPACT) by allowing the use of biodiesel fuel to meet requirements of federal and state fleets to purchase alternative fuel vehicles. EPACT presently requires only the purchase of alternative fuel vehicles and not the actual use of alternative fuels, such as biodiesel.

The biodiesel legislation is included in the Energy Conservation Reauthorization Act (ECRA) of 1998. President Clinton is expected to sign the bill soon.

The legislation should help increase farm income by making biodiesel readily available to the US public and private truck and bus fleets. It also may reduce federal and state expenditures on EPACT compliance. The Congressional Budget Office estimates that the legislation will save the federal government $40 million over the next five years by reducing expenditures on more costly alternative fuels and vehicles.

The legislation allows federal and state fleet managers to meet the Energy Policy Act's alternative fuel vehicle (AFV) acquisition requirements by using biodiesel added to conventional diesel at blends of 20% and higher. The use of biodiesel would produce credits to offset up to 50% each year of vehicle acquisition requirements.

"This legislation caps a three year effort by American farmers to capitalize on the tremendous potential of biodiesel," said Jeffery Horvath, CEO of the National Biodiesel Board. "Once President Clinton signs the bill into law, we expect the sales of biodiesel fuel to skyrocket, which will help raise farm income, improve the environment and also reduce dependence on foreign oil."

Biodiesel is a renewable diesel fuel made from sources like soybean oil.

Source: National Biodiesel Board