This is an excerpt from EERE Network News, a weekly electronic newsletter.

June 15, 2005

New Tax Credit Sparks First Biodiesel Plant in Oklahoma

Oklahoma Governor Brad Henry signed into law on June 6th a bill that will provide tax credits for the production of biodiesel within the state, creating an incentive that has already spurred construction of the state's first biodiesel facility. House Bill 1398 will provide a tax credit of 20 cents per gallon of biodiesel for the first five years of production, up to $5 million per year. It applies to new and expanded facilities producing at least 25 percent of their capacity. Biodiesel plants placed into production after 2012 will earn a smaller tax credit: 7.5 cents per gallon for the first three years of production, capped at $750,000 per year. The bill's passage in the legislature led Apollo Resources Inc. to announce that its subsidiary, Earth Biofuels, had completed the purchase of four acres of land in Durant for construction of a biodiesel refinery that will produce 10 million gallons of biodiesel per year. Construction will begin immediately, and the plant could start producing biodiesel in October. See Apollo Resources press release and House Bill 1398 (PDF 698 KB). Download Adobe Reader.

Biodiesel is already firmly rooted in Iowa, but the state will gain another biodiesel plant if Cargill's newly announced plans come to fruition. The company plans to build a plant in Iowa Falls capable of producing 37.5 million gallons of biodiesel per year. The plant will initially draw on soybean oil but could eventually accept animal fat or waste grease as its biodiesel source. If approved, construction will begin this summer, and biodiesel production will start in April 2006. See the Cargill press release.

According to the National Biodiesel Board (NBB), U.S. biodiesel plants can currently produce 110 million gallons of biodiesel per year, but idled chemical industry facilities could potentially double U.S. biodiesel production; these facilities are increasingly contributing to U.S. biodiesel supplies. Meanwhile, the NBB estimates that dedicated biodiesel production capacity could double within the next year. See the NBB Fact Sheet, "U.S. Biodiesel Production Capacity" (PDF 68 KB).