In an effort to further reduce American dependence on foreign oil, the U.S. Environmental Protection Agency recently announced new targets for the domestic biodiesel industry. Under the new standard, refiners will be required to blend 1.28 billion gallons of biodiesel into traditional transportation fuel in 2013, compared to a 1-billion gallon requirement for 2012.

The EPA’s new rules are enforceable under the Energy Independence and Security Act of 2007 (EISA) which established the second phase of the Renewable Fuel Standards program. The EISA already specifies a one billion gallon minimum volume requirement for the biomass-based diesel category for 2012 and beyond, so the EPA’s slight requirement increase shouldn’t come as that much of a surprise to the diesel industry.

Biodiesel is a non-petroleum fuel typically made from fats or oils such as soybean oil, but it can also be derived from waste vegetable oils. According to the National Biodiesel Board, it can be blended at any level with petroleum diesel to create a biodiesel blend, and can be used in existing vehicles with diesel engines with little or no modifications.

The move is good news for states like Iowa that depend on the biodiesel industry to buy up their soybean crops. Currently Iowa is the country’s largest producer of biodisel with 13 dedicated facilities and the capacity to produce 320 million gallons on its own every year. Yet, some are still doubtful that using food crops for fuel production is a good use of America’s agricultural capabilities, and there have been questions about whether or not biodiesel is really a cleaner-burning fuel. And, of course, the petroleum industry is unhappy, having previously claimed that the EPA’s mandate makes it more expensive to produce diesel, a cost that’s ultimately passed on to the consumer.

Still, Agriculture Secretary Tom Vilsack seems optimistic that the move will be good for the economy: ”Over the past three years, we have doubled generation from renewable energy and [this] announcement by the EPA will ensure that we are continuing to utilize biodiesel to help meet our energy needs, create jobs and strengthen the rural economy,” he said.

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