Rebate Encourages Drivers to Use Soy-Based Fuel

Topics:  Biodiesel

Lisa Nurnberger
Berlin, Maryland
Voice of America
February 18, 2005

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Many drivers who pull into the Cropper Oil gasoline station in the small farming community of Berlin, Maryland, are surprised to find one of pumps labeled "100% Soy Biodiesel."

Station owner James Warren says he is happy to explain when customers ask him, "What is that stuff?" First he tells them what is in the plant-based fuel. Then he gives them an economic reason to try it. "We tell them about the Maryland Soybean Board rebate," he says. "They just eat that up, and they start coming in, and they're a regular customer for us."

The fuel -- made from vegetable oil -- is literally homegrown and less polluting than petroleum. But, without the rebate, it's about twice as expensive as regular diesel fuel -- putting it out of reach for many consumers. The Soybean Board -- funded by farmers around the state -- reimburses drivers for about half of what they spend for biodiesel, up to $1,000 a year. With the rebate, it winds up costing a little less than diesel.

James Warren started selling biodiesel two years ago when his customers began asking for it. Now he's introducing other people to the product. "I feel good about it," he says. "I just love it. I mean it's good for the environment, and it's helping our farmers, and a lot of my business are farmers. So we're sold on it, that's for sure."

Any vehicle with a diesel engine can run on biodiesel. Most of the customers at the Berlin station mix it with regular diesel by pumping a little of this and a little of that. While any ratio can be used, the maximum environmental benefits occur when biodiesel makes up at least 20% of the mixture. The fuel releases half the carbon monoxide and greenhouse gases as petroleum products. But biodiesel does increase nitrogen air pollution by about 10%.

Ron Cascio fills up at Cropper Oil regularly. The building developer speaks of biodiesel in almost reverential tones. He's been using it for so long, he's reached the $1,000 rebate limit. So he's paying full price at the pump. But he says he decided to "get off petroleum" for good and now uses 100% biodiesel.

"It's not cost effective at all to my pocket," he admits. But he believes that the price of regular gasoline fuel doesn't reflect its true cost. "If we paid the full cost of petroleum use -- from extraction, to transportation, to cleaning up the spills, to defense -- and put that price on the pump…biodiesel wins," he argues.

The American biodiesel industry began in the Midwest in the 1980s. Farm cooperatives were crushing soybeans to make livestock feed…but they didn't know what to do with the other half of the product -- the oil. So they started converting it to biodiesel. Eastern farmers in states like Maryland also grow soybeans, and they are anxious to cash in on the additional market. Biodiesel refineries are now springing up along the east coast.

Industry officials expect production and sales to take off once a new federal tax break goes into effect this year.