Massachusetts suspends biodiesel mandate

By Ron Kotrba | June 15, 2010
Posted July 7, 2010

The Massachusetts B2 biodiesel mandate set to go into effect this month has been indefinitely suspended, according to the state department of energy resources. Dwayne Breger, director of the renewable energy division for the department said that the Clean Energy Biofuels Act provided the commissioner with several outs, or possible reasons to suspend the mandate, "and price impact was one of them," Breger said. "The expiration of the federal tax credit would cause the full brunt of the extra cost to be borne by the Massachusetts consumer."

Breger said without the $1 per gallon federal blender credit on the books, the added cost of a B2 blend would be around 3 cents per gallon.

Ed Burke with Dennis K. Burke Inc., a Chelsea, Mass.-based oil distribution company, said the state really had no choice but to suspend the mandate. He said even if the federal tax credit were reinstated today, the state would need about a year to implement the biodiesel standard. When asked if this suspension of the Massachusetts mandate could set a dangerous precedent for other states with biodiesel requirements to follow, Burke said he doesn't see how it cannot spread. He said in the same breath the government is pushing for green jobs and energy security while ignoring measures necessary to fulfilling its goals. "It's unexplainable," Burke said.

Breger said, "We're establishing a voluntary program to address the issues, and to keep the momentum going," adding that the voluntary program will help address any remaining uncertainties the state still has regarding implementation.

Prior to the U.S. EPA's determination in the final RFS2 ruling that soy biodiesel achieves a 57 percent reduction in greenhouse gas emissions compared to petroleum diesel, Massachusetts took very seriously EPA's proposal that soy biodiesel was only marginally better than petroleum at reducing GHGs. The state mandate therefore was tailored to allow only waste-based biodiesel to satisfy the requirement, despite the fact that in its final rule EPA determined that soy biodiesel achieves advanced biofuel status by virtue of its significant GHG reductions. While some thought the state would bend on allowable biodiesels to satisfy the mandate after EPA's final rule came out this winter, it never did.

Breger said there were also some unexplained complexities of implementation. "We're a small state, and half of our fuel comes from out-of-state terminals," he said. "We have to be careful not to create a disadvantage to Massachusetts terminals. Also we have no legal authority out of state to place compliance obligations on terminals."

The volunteer program is expected to engage all parties to help find solutions for shortcomings in implementing the state biodiesel mandate. The department of energy resources stated, "Lessons learned from this voluntary program will provide valuable learning for expanding the program in the future. Without imposing burden on any entity or business, [the department] wants to assist those entities that wish to pursue 'greener' choices in their fuel use."

The department intends to use the information provided to it voluntarily to assist development of a streamlined process to both qualify fuel and report on its in-state consumption. "In so doing, [the state] hopes when market conditions permit, it can implement the biofuel mandate with minimal administrative burden to those entities affected."
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