A mandate in Minnesota to increase blending biodiesel into petroleum from 5% to 10% may be delayed a year in the state.
This month officials from three state agencies wrote a letter to state lawmakers asking that the mandated increase from B5 to B10 be delayed to allow for infrastructure and regulatory protocols be in place.
By law, Minnesota’s minimum content mandate is set to increase to B10 in 2012 and 20% in 2015.
“Before a new mandate can be implemented, however, the law (Minn. Stat. 239.77, Subd. 2(a)) requires the commissioners of agriculture, commerce and the pollution control agency to determine whether four statutory conditions have been met,” the letter from those agencies said.
These conditions involve federal standards for blend specifications, the production capacity of biodiesel in Minnesota, the amount of infrastructure and regulatory protocol for biodiesel blending and the source of feedstocks.
“After much discussion and in consultation with the Minnesota Biodiesel Task Force and with stakeholders, the commissioners agree that these four conditions have not been met completely in Minnesota,” the letter said.
For that reason, the agencies recommend a one-year delay in moving up to B10 from the current B5 mandate.
Some of the questions remaining include the status of the biodiesel excise tax credit, with the $1 per gallon federal tax credit for blenders slated to expire at the end of this year, and what impact that would have on the value of Renewable Identification Numbers.
“RIN values will rise to make up some or all of the value of the tax credit, should the tax credit expire,” the letter said. “Industry experts contend that the situation will become more transparent in the coming months.”
The letter also states that the agencies will reevaluate Minnesota’s readiness to implement B10, continuing to seek input of the Minnesota Biodiesel Task Force and stakeholders throughout the process.