The Pacific Northwest has long been known for its wealth of natural resources and innovative industries. This winning combination continues with the rapid rise of a biodiesel industry that is both pioneering new technologies and supporting growth of regional feedstocks. However, while the Northwest offers many unique advantages for biofuels development, it also harbors its own unique challenges.

The region is well-suited for a thriving biodiesel industry with strong demand from private consumers and fleet operators, ample policy support and financial incentives from state and local governments. Seattle has the highest concentration of personal biodiesel users in the country, and dozens of biodiesel stations dot the Interstate 5 corridor from Canada to the California border. Numerous municipal and commercial fleets are using biodiesel blends, and Washington's largest diesel user-the state ferry system-has made biodiesel usage a priority. Public ports up and down the coast have been some of the most aggressive adopters of biofuels blends.

Broad-reaching coalitions of government agencies, environmentalists, growers, health organizations, academia and biodiesel businesses have worked together to break down traditional policy barriers. Groups often at odds with each other have formed alliances that cross both geographic and cultural barriers. Literally hundreds of biofuels-related bills have been introduced in recent legislative sessions as advocates in the region seek the best means of supporting industry development.

Last year, Washington state became the second in the country to adopt a Renewable Fuels Standard (RFS) for biodiesel-with the first tier (B2) scheduled to take effect in the fall of 2008. During the recent legislative session, lawmakers directed public fleets to aggressively increase their biofuels usage, expedited permitting for biofuels production, and funded much-needed feedstock and market incentive research programs.

At press time, the Oregon legislature was considering an RFS measure for biodiesel similar to Washington's. Meanwhile, Portland is already busy implementing the first municipal RFS measure in the country, a B5 content requirement that went into effect July 1, 2007.

Not to be outdone, the Idaho legislature recently passed two new programs to support biofuels infrastructure: an income tax credit for capital investment and matching grants for retail fuel dealers. Montana continues to support its biofuels industry through tax incentives and other programs.

Now, combine this demand-side interest with optimal growing conditions for regional Brassica feedstocks on the supply-side. Many farmers are already integrating oilseeds into their crop rotation. Universities in all four states have devoted research funds to biofuel agriculture, including the use of oilseed crush products for animal feed and other value-added coproducts. Rural communities have added their support to the burgeoning industry as a way to develop their economies and revitalize local farming.

Even with this enthusiasm and energy, the Northwest biodiesel industry faces a number of key challenges. Competing markets for food-grade oils, and the resulting food-versus-fuel debate, have resulted in volatile feedstock costs and disrupted business plans.

As Northwest states implement fuel standards, complications inevitably arise as policies travel the bumpy road to implementation. Regional distributors have to comply with different RFS requirements in each state, and even different cities within the same state. Washington state chose a volumetric approach while other jurisdictions have a universal content requirement. Efforts to promote use of regional feedstocks must wrestle with interstate commerce concerns, and industry partners continue to debate how public policies and incentives should apply to next-generation fuel technologies.

In response to these unique challenges and opportunities, the Northwest Biofuels Association (NWBA) was formed to represent biodiesel and ethanol producers, brokers, distributors and retailers, along with industry service providers. By working in concert with members and a strong coalition of allies, the NWBA is well-situated to overcome our regional hurdles, maximize our unique opportunities and serve as a model for other regions.

Nikola Davidson is the program director for the Northwest Biofuels Association. Reach her at nikola@nwbiofuels.org or (206) 389-8660. Peter Moulton is the program coordinator for Harvesting Clean Energy.