Tax incentives fuel the move toward biodiesel

URBANA—More than 100 years ago, Rudolf Diesel ran his prototype diesel engine on peanut oil because that was the only source of a self-igniting fuel. Today, diesel engines are coming full circle, as the move continues toward alternative fuels such as biodiesel, which contains a percentage of a vegetable oil derivative.

This effort was given a big boost recently in Illinois by legislation providing a tax incentive for biodiesel—one of the first of its kind in the country, said Alan Hansen, University of Illinois agricultural engineer. The new legislation gives a partial sales tax exemption of 20 percent on blends that contain 1 to 10 percent biodiesel.

Of the alternative diesel fuels, Hansen said biodiesel is probably the furthest along the road to becoming commercialized and being used alongside regular diesel.

“The recent tax incentives only move it further down that road,” he noted,

“because one of the biggest obstacles facing biodiesel has been its higher cost when compared to petroleum-based diesel.”

According to Hansen, the new tax breaks also demonstrate foresight by anticipating the coming regulations on the sulfur content of diesel fuels. The EPA is mandating the introduction of ultra-low-sulfur diesel fuel, which does not provide as much lubricity as traditional diesel. Biodiesel helps to solve this problem because it provides the lubricity that you lose with low-sulfur fuel.

In fact, Minnesota recently required that all diesel fuel contain at least 2 percent biodiesel—primarily for this reason. Even 1 or 2 percent biodiesel can boost the lubricity of the fuel by as much as 40 percent.

Biodiesel also offers important lessons on how alternative fuels gain acceptance, Hansen said. This is instructive for the newer blends on the block, such as e-diesel, a blend of ethanol and diesel.

One of the keys for such fuels is engine warranties. Will engine manufacturers cover warranties when alternative fuels are used? As Hansen explained, engines have been developed over many years to run on diesel fuel that meets a specific standard. But when you bring along new fuels,

such as biodiesel or e-diesel, they have different properties.

Most engine companies say that using blends of up to 20 percent biodiesel will not void their warranties on parts and workmanship, he said. But many require that biodiesel meet the D-6751 standard, which was set in 2001 by the American Society for Testing and Measurement.

In the e-diesel arena, Hansen and his colleagues have been conducting durability tests since 1999 to find out the effect of e-diesel on engines.

“So far, there has been negligible difference in performance between e-diesel and pure diesel,” he noted, “although machinery using the e-diesel blend has had slightly higher fuel consumption.”

In addition to the warranty issue, be aware of the effect on storage, he said. Biodiesel is more biodegradable than regular diesel, giving it an environmental edge but also a shorter storage life.

If biodiesel biodegrades in a storage tank and then gets consumed by the engine, there’s a potential for deposits and sludge in the fuel injection system. That’s why warranty statements list numerous precautions about using biodiesel. Storage is a major one.

E-diesel containing 15 percent ethanol, 5 percent additive and the remainder regular diesel biodegrades about the same as B20 (diesel containing 20 percent biodiesel). But it also faces a different obstacle—flammability. The ethanol in e-diesel is more flammable than regular diesel. Therefore, he said, to use e-diesel, fuel tanks will need

safety features similar to those found in gasoline fuel tanks.

On the plus side for both biodiesel and e-diesel are emissions, Hansen said. According to the U.S. EPA, a 20-percent blend of biodiesel reduces carbon monoxide by 12 percent, hydrocarbons by 20 percent and particulates by 12 percent when compared to petroleum-based diesel. What’s more, using the blend in existing, unmodified engines provides an immediate reduction in emissions, making it easier to meet the EPA’s standards.

“Beyond all of these advantages, however, producers have yet another motivation to use diesel fuels blended with either vegetable oil derivatives or ethanol. And it may be the biggest motivation of all,” Hansen said. “The farmers who use these fuels are using something that they have had a hand in producing.”

This, as much as anything, he added, will power biofuels—both biodiesel and e-diesel—even further down the road to acceptance.

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