Chicago area terminal soon to offer biodiesel

By Bryan Sims | November 17, 2010
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Posted Dec. 1, 2010

Beginning later this month, Renewable Energy Group Inc. will offer its branded REG-9000 biodiesel for splash blending at a Kinder Morgan terminal site near Chicago, in Agro, Ill.

According to Jon Scharingson, REG's director of marketing, the new terminal will expand REG's downstream capabilities that will allow petroleum marketers to continue to supply biodiesel to a healthy B11 market.

Illinois has excise tax abatement for biodiesel blends of B11 or higher sold in the state, which is in effect through Dec. 31, 2013. Created in 2003, the sales tax incentive provides a partial sales tax exemption of 20 percent on biodiesel blends from B1 to B10. Blends above B10 receive a total exemption from the state sales tax of 6.25 percent, effectively creating an Illinois-specific market for B11.

"Illinois petroleum distributors blend more biodiesel than any other state due to the B11 incentive," Scharingson said. "Kinder Morgan's Agro terminal is one of the most active terminals in the state of Illinois. REG is excited to offer its customers the opportunity to pull transport loads from this terminal."

The Kinder Morgan terminal is equipped to handle large volumes of various fuel and chemical commodities that feature a total storage capacity of nearly 2.5 million barrels from 218 tanks with each tank having a storage capacity range between 50,000 to 80,000 barrels. Located along the shore of Lake Michigan, the terminal has access to multiple forms of land and water transport.

REG expects biodiesel from its two production facilities in Seneca and Danville to be the primary suppliers for the new terminal location.
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