Minnesota’s 10% Biodiesel Mandate

July 1, 2014 ushered in a change in the existing biodiesel mandate—contentious since its 2002 passage—on the percentage present in diesel fuel blends. Approved in an act of the 2014 Minnesota Legislature, many Minnesota diesel users (those in certain industries are exempted temporarily or indefinitely) are required to purchase diesel blends containing at least ten percent biodiesel; from October until March, due to lower daily temperatures and the threat of fuel gelling the requirement will be 5 percent biodiesel. Currently, state law requires every gallon of diesel fuel to contain at least 5 percent biodiesel, and 2 percent during the winter; supporters are applauding the initiative which raises the percentage to the highest in the nation.

The mandate is good for the farmers of the region: biodiesel is most often made from soybean oil, which, as the nation’s third highest-producing soybean state, Minnesota has in abundance. Unfortunately, the mandate may not ultimately be good for consumers, who could bear its unintended cost: higher prices for transportation and goods.

Industry leaders argue that legislators were aware of the potential problems associated with increasing the percentage of biodiesel prior to passing the bill. Major exemptions contained in the state’s new biodiesel statute are considered by John Hausladen, president of the Minnesota Trucking Association, as “a de facto admission by the Legislature that a universal, year-round biodiesel mandate is simply too risky for Minnesota’s economy.” Exemptions are in place for railroads, taconite and copper mining, and logging, with permanent exemptions in place for the state’s nuclear power industry, and the U.S. Coast Guard. Hausladen added that, “through such action, legislators acknowledged that biodiesel is not reliable enough to ensure that these vital industries would not suffer serious disruptions.”

Truck operators in all industries face the potential for complications with the use of biodiesel, and to avoid breakdowns, truckers invest in preventive measures: more frequent filter changes, adding heating devices and anti-gelling agents to fuel, augmenting their tank with No. 1 diesel, which costs significantly more and gets poorer fuel mileage.

When the original two percent biodiesel mandate law was passed in 2002, the burgeoning increase in demand for soybeans effectively created a new industry in rural Minnesota, one which is now mature and viable. It could be argued that the biodiesel mandate has sustained the industry throughout the years; still, several other states have fostered and grown similar industries without a mandate in place.

Proponents of the mandate laud biodiesel for a variety of reasons, but more research needs to be done. Millions are affected by the myriad implications tied to this increase—not just farmers, but also the producers, truckers and consumers. With more research into the short- and long-term effects of increased biodiesel use, better decisions—ones which take into account the needs of all those involved—will keep all sectors of Minnesota’s economy healthfully moving forward.