Trailblazing Biodiesel

By Mike Levin, Illinois Soybean Growers director of public policy and regulatory affairs

Illinois soybean farmers have been driving commercialization of biodiesel since the mid-1990s. The ISA checkoff program has invested in its research and development, while Illinois Soybean Growers (ISG) has led efforts to secure legislation and regulations to support biodiesel use.

We have had success, but it’s time to kick trailblazing biodiesel up a notch in Illinois.

Pricing changes are expected to improve the environment for selling biodiesel this fall. ISA has been working on a multi-year project to capitalize on that by increasing the average blend of biodiesel used in Illinois from its current level of eight percent to 13 percent – a more than 60 percent increase. We ultimately would like to increase common blends up to at least 20 percent.

And there is incentive. Market conditions have changed the economic benefit for Illinois retailers to carry biodiesel blends above B11 (11percent biodiesel/89 percent diesel). Yet, 25 percent of Illinois fuel marketers do not sell biodiesel blends above five percent. They are not all taking full advantage of the Illinois state sales tax exemption by carrying at least B11.

Trailblazing BiodieselLet me explain. The Illinois Biodiesel Sales and Use Tax Credit began in 2003. The credit offers a full exemption from the 6.25 percent sales tax on biodiesel blends exceeding 10 percent and a 20 percent exemption for blends of B1 to B10. ISG has successfully advocated for continuation of this credit to help the biodiesel industry maintain strong economic activity in the state.

That effort has paid off. The Illinois biodiesel industry has grown from less than 20 million gallons per year in 2003 to more than 200 million gallons, supporting about 2,000 Illinois jobs. According to checkoff-funded studies, biodiesel production and use in Illinois generates $145 million in household income and $3.4 million in farm income annually. That research finds biodiesel has increased the price of soybeans by 63 cents per bushel. With an increase in blend levels, the value to Illinois soybean farmers could be another seven cents per bushel.

Illinois soybean farmers are also leaders in creating groundbreaking partnerships, such as the B20 Club, a select group of Illinois organizations running fleets on biodiesel blends of 20 percent or greater. We also continue to encourage additional crush plant capacity in the state.

Our strategic positioning builds a strong foundation to take the next step to move to B20 blends in Illinois. Now we need you to add your voice to the effort. Visit VoiceforSoy.com to learn more and participate in ISG advocacy to trailblaze biodiesel production and use in Illinois.