Fuel fight: Farmers, truckers clash over biodiesel mandate

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Another step in Minnesota's push toward more renewable fuels takes place on Tuesday, July 1, when most diesel fuel sold in Minnesota will need to contain 10 percent biodiesel, compared to the current 5 percent mandate.

Minnesota is the first state in the nation to require the 10 percent biodiesel mixture.

Most biodiesel is made from soybeans, so the mandate is a boon for Minnesota's soybean farmers, according to the St. Paul Pioneer Press.

Gov. Mark Dayton and the Minnesota Department of Agriculture say the move will bring economic and environmental benefits. It's a "clear win" for Minnesota, according to Charlie Poster, assistant commissioner of the Agriculture Department.

"It drives down the cost of fuel and increases the value of soybeans, which can put money in farmers' pockets," he said, according to the Pioneer Press.

It's also much better for air quality, Poster said.

"For every gallon of biodiesel we blend into the diesel fuel stock, it removes 1.5 gallons of carbon dioxide," Poster added.

But the trucking industry opposes the mandate, in part because biodiesel costs more than traditional diesel fuel, and because in the past the blended fuel has caused a variety of engine problems, MPR News reports.

Minnesota Trucking Association President John Hausladen also points out the Legislature exempted certain industries from the mandate, including railroads, mining and logging.

"So it's a de facto admission that the Legislature doesn't think it's reliable," Hausladen argues, according to the Pioneer Press. "We have members who've just decided, 'I'm going to buy my fuel outside of Minnesota.' "

Right now, only 2.7 percent of Minnesota’s vehicles operate on diesel fuel, the Star Tribune reports. But sales of biodiesel are expected to increase from the current 40 million gallons to 60 million gallons per year.

There are three biodiesel production plants in Minnesota and their combined capacity is about 63 million gallons per year. They'll need a lot of soybeans to make that much fuel, and the price for soybeans could go up by as much as 73 cents per bushel, according to the Agriculture Department.

The 10 percent blend level will drop back to 5 percent during the winter months. Another step up in the biodiesel ratio will occur in 2018, when the mandate goes up to 20 percent.

On the national level, the EPA is considering scaling back the amount of biodiesel that refineries are required to blend into their fuel. Minnesota's U.S. senators are fighting the proposal, saying it could cost Minnesota as many as 1,500 jobs.

Sens. Al Franken and Amy Klobuchar are among a half-dozen Democrats calling on the Obama administration to reconsider the EPA proposal, which is still waiting for final approval.

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