Minnesota Mandates 2-Percent Biodiesel Blend

August 02, 2002

The Minnesota Legislature passed a bill in March making it the first state to require biodiesel to be blended with conventional diesel fuels. The mandate kicks in at two percent requirement under a couple of scenarios: when the state's production capacity for biodiesel reaches eight million gallons and when 18 months have passed since a federal action (such as a tax credit) creates a two-cent drop in the price of such a biodiesel blend. If there is no federal cost break for the biodiesel blend, the mandate will kick in on July 1, 2005, as long as the production capacity is at eight million gallons. Biodiesel is made from soybeans or from vegetable oils.

The legislation was modeled after a similar mandate for ethanol begun in the 1980s that has become a model for other states interested in developing a native ethanol industry. Although it passed by a wide margin in both houses of the legislature, Minnesota Governor Jesse Ventura allowed the bill to become law without signing it because he is opposed to government mandates. For a summary of the arguments in favor of this mandate, see New Rules-Agriculture.

For specifics of the legislation, see the conference committee summary.