Trends

Mandates: Governors, legislatures pave way in 2006 for greater use of biodiesel

— Arizona Gov. Janet Napolitano signed an executive order in September committing the state to reduce carbon dioxide and other greenhouse gas emissions, and creating a state panel to develop a plan to achieve the goal. This includes recommendations for increasing renewable energy use, and production of biodiesel and ethanol.

— California Gov. Arnold Schwarzenegger issued an executive order that, among other things, establishes a target for the state of California to produce and use a minimum of 20 percent of its biofuels within California by 2010, 40 percent by 2020 and 75 percent by 2050. Biofuels include both ethanol and biodiesel.

— Florida Gov. Jeb Bush signed the Florida Energy Act, which provides for sales tax exemptions and investment tax credits for costs associated with renewable energy technologies, including biodiesel.

— Illinois Gov. Rod Blagojevich unveiled a new plan in August that would replace 50 percent of the state's current supply of imported oil with renewable homegrown biofuels, like ethanol and biodiesel. The plan would also invest $25 million to help build five new biodiesel plants.

— Iowa Gov. Tom Vilsack signed into law in May, two renewable fuels and infrastructure bills that provide point-of-sale retailers with a 3-cent income-tax credit on each gallon of a B2 blend or higher. The legislation also establishes a renewable fuels standard requiring that 25 percent of a retailer's fuel sales be ethanol or biodiesel by 2020.

— Michigan Gov. Jennifer Granholm announced in August that the state is setting aside $250,000 to help service station owners convert gasoline pumps to alternative fuel pumps. The hope is that the grants will lead to 1,000 alternative fuel pumps installed or converted by 2008 — a 20 percent increase. This is the second round of grants being made available by the state.

— New York Gov. George Pataki signed several pieces of legislation related to biodiesel, including a biofuel production tax credit of 15 cents per gallon after the first 40,000 gallons are produced; elimination of all motor fuel taxes on alternative fuels; cost-share infrastructure grants for private sector gas stations to install and/or convert pumps for B20 or E85; and a residential Bioheat fuel tax credit in residential heating applications.

— Pennsylvania Gov. Edward Rendell launched a new plan in May — called the "PennSecurity Fuels Initiative" — to reduce the nation's dependence on foreign oil by replacing 900 million gallons of the state's transportation fuels over the next decade with alternative sources, such as ethanol and biodiesel. It also requires that a certain percentage of retail transportation fuel sales contain eligible fuels such as biodiesel, and it also invests in infrastructure.