The Use of Biodiesel in Vermont

An Introduction to an Alternative Fuel Source for the State of Vermont
PRS Briefs
PRS Policy Brief 0607-04
Wednesday, May 2, 2007

For reasons ranging from environmental health to the stability and long-term viability of petroleum as a fuel source, exploring alternative energy has emerged as an important issue for the state of Vermont. One aspect of this issue is the prospective wide scale use of biodiesel as a replacement for conventional petroleum diesel (petrodiesel). Although supply and cost constraints mean that biodiesel cannot currently be used to replace petrodiesel completely, it can be blended with petroleum diesel in order to reduce fossil fuel use.

This report investigates various environmental, economic, and feasibility issues pertaining to the use of biodiesel in the state of Vermont. It also identifies a number of policy options for the state of Vermont relating to the use of biodiesel.

Key findings in this report include:

  • Pure biodiesel (B100) can run in almost any diesel engine following minor modifications to the engine's gaskets and seals.
  • Biodiesel is primarily used for fuel when blended with traditional diesel. Low blends of biodiesel can be used in almost any diesel engine without modification.
  • Commonly used blends of biodiesel include: 2, 5, 10, and 20 percent.
  • Concerns for biodiesel use include: cold weather function, solvent properties of B100 and high blends, quality control, available infrastructure, warranty issues, and consumer awareness.
  • There are currently 17 biodiesel distributors in the state of Vermont; they were responsible for selling 275,000 gallons in 2005. In total, Vermont used 63 million gallons of petrodiesel in the same year.
  • Biodiesel use decreases carbon dioxide emissions and slightly increases nitrogen oxide emissions relative to petrodiesel use.
  • Farmable land and/or feedstock importation is required to make biodiesel.
  • Storage infrastructure will need to increase in order to provide more biodiesel distribution lines.
  • A key to increased biodiesel usage is to make it a cost-effective alternative to traditional petrodiesel. Currently, without taxes on petrodiesel or subsidies for biodiesel, biodiesel is not cost-effective.
  • Policy options for increasing state-wide biodiesel usage include: 1) a mandate that all diesel sold in the state contain a certain percentage of biodiesel; 2) a mandate that the state's diesel fleet use biodiesel instead of petroleum diesel; and 3) tax incentives for distributors or consumers.