Bioenergy

Biodiesel Consumption Enters Mainstream U.S.

American Biofuels (ABF) expects to increase its biodiesel production to 40 million gallons per year (mgy) in 2006 on the East and West Coasts, largely in response to major commitments by legislators including Governor Schwarzenegger (CA), Senator Ashburn (CA) and Governor Pataki (NY). In 2005, the entire biodiesel production in the United States was 66 mgy.

Demand is expected to increase by several hundred percent over the short term. With biodiesel selling at or below the price of regular diesel, it is no longer a specialty market. Automobile manufacturers like Daimler-Chrysler, for example, have approved the use of B-20 fuel (20% biodiesel and 80% diesel) in its commercial, military and government vehicles. ABF is planning a new 20-mgy East Coast facility to supply New York State and surrounding states and expects this facility to be in production by late 2006. ABF is also expanding its existing production biodiesel plant in Bakersfield to service California. The company originally expected its existing 5-mgy biodiesel plant to complete its expansion to 10 mgy by January 2006. However, ABF decided to accommodate further expansion, delaying completion until March 2006. American Biofuels, which is 35% owned by Green Star Products, has been a member of the National Biodiesel Board (NBB) since 2001 and in the same year received its registration for three EPA certificates for its biodiesel fuel and fuel additives. ABF was approved to participate in the U.S. Department of Agriculture (USDA) Bioenergy Program, which pays producers cash incentives for biodiesel production.