Congress completed approval of legislation today that will allow public vehicle fleets to earn credits under the Energy Policy Act (EPACT) of 1992 by using a blend of 20 percent biodiesel and 80 percent petroleum diesel, commonly called (B-20). The American Soybean Association (ASA) had made passage of the legislation one of its top priorities because it could add up to 11 cents per bushel to the price of soybeans as well as reduce U.S. dependence on foreign oil and encourage use of a cleaner burning fuel.

"Soybean producers and America needed this legislation to boost farm prices while benefiting the environment," said ASA President Mike Yost, a soybean producer from Murdock, Minnesota. "This legislation is truly a win-win situation because it will increase vegetable oil consumption without new tax breaks or subsidies. It will also give private and government fleet managers greater flexibility to meet their current alternative fuel use requirements under EPACT."

The House of Representatives approved amendments to the Energy Policy and Conservation Act (H.R. 4017) on September 28. The bill included language to allow federal, state and other public vehicle fleet managers using B-20 or higher blends to earn one EPACT credit for each 450 gallons of biodiesel used by medium and heavy-duty trucks and buses to reduce U.S. dependence on imported petroleum. House Commerce Committee Members John Shimkus (R-IL) and Karen McCarthy (D-MO) were key promoters of the legislation. The Senate had earlier approved the EPACT amendments on October 8 in an effort led by Senators Larry Craig (R-ID) and Tim Johnson (D-SD). Because the Senate added several other provisions, the House had to reconsider the bill a second time.

The same biodiesel language has also been included in a "farmer relief package" as part of the agricultural appropriations bill for FY-1999. Leaders of this effort included Senators Christopher Bond (R-MO), Charles Grassley (R-IA), Richard Lugar (R-IN), Tom Harkin (D-IA), and Herb Kohl (D-WI) along with Agriculture Appropriations Subcommittee Chairman Thad Cochran (R-MS) and Ranking Democrat Dale Bumpers (D-AR). Representative Tom Latham (R-IA) championed the biodiesel language in the House appropriations package.

According to the Congressional Budget Office, the legislation will save the Federal government $10 million annually from reduced EPACT compliance costs. The bill was supported by the natural gas industry as well as by soybean producers and the biodiesel industry.

A modest, nationwide market for biodiesel of 50 million gallons a year could increase farm income by $160 million annually, according to the U.S. Department of Agriculture. Prices for soybeans, the major source of biodiesel in the United States, are at their lowest price in 10 years, reflecting a 35 to 40 percent decline in the past two years.