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Questions? Modifications Benefits Biodiesel Tax Credits Do I need to do any modifications to my car or truck to run biodiesel? On any vehicle newer than 1995, no modifications are necessary. Some vehicles older than 10 years old have rubber fuel lines, which will be degraded over time by biodiesel. Just replace these with current synthetic fuel lines, and you're done. We also recommend that you replace your fuel filter after your first tank of biodiesel, since biodiesel is a very good solvent and will scrub out all the tars, varnishes, and gums left by fossil diesel in your fuel syste Will my biodiesel void my diesel engine's warranty? Most major diesel vehicle manufacturers have already acknowledged that biodiesel will NOT void your warranty. Check with your dealer or diesel mechanic for further details. Companies such as Cummins, Caterpillar, and John Deere have extensively tested biodiesel and are strong supporters.
Can I mix my biodiesel with regular petroleum diesel? You can mix biodiesel in ANY ratio, back and forth, with no problems What are benefits of using biodiesel? Biodiesel is clean. Using biodiesel instead of traditional petroleum diesel fuel can reduce emissions, including particulate pollution, air toxics and lifecycle carbon dioxide emissions associated with global climate change. Biodiesel is renewable. Biodiesel can be produced from a variety of non-petroleum feedstocks—often locally available, renewable sources. Biodiesel is made here. Whatever the source, the feedstocks can be produced locally. In 2007, ~ 450 million gallons of biodiesel were produced from locally grown materials - providing jobs and support to local economies and a shorter, more secure supply line to your community. Biodiesel is high performance. Biodiesel adds lubricity and has a high cetane rating. Biodiesel has the highest energy balance of any alternative fuel. What are benefits of using biodiesel? Biodiesel is clean. Using biodiesel instead of traditional petroleum diesel fuel can reduce emissions, including particulate pollution, air toxics and lifecycle carbon dioxide emissions associated with global climate change. l ) What is a biodiesel: Biodiesel is the alternative fuel for the vehicles made from renewable energy sources like vegetable oil, animal fats and also recycled restaurant grease. Biodiesel can be used as the fuel in pure form or it can be blended with petroleum diesel. The blend of 20% biodiesel and 80% petroleum diesel is designated as B20 while pure biodiesel is designated as B100. 2) Which blend of biodiesel is suitable for the vehicles: Smaller the content of the biodiesel in the blend more easily it can be compatible with the diesel engine of the vehicle. As the percentage of biodiesel increase in the blend, certain issues like changes to be carried out in engine, performance of engine, and warranty of the engine crop up, however, they can be addressed easily. 3) Is biodiesel available easily in the market: Biodiesel is available in all 50 states of US and as per the records, in the year 2007 around 450 million gallons of biodiesel was sold. There are number of retailers, petroleum distributors and biodiesel distributors offering various blends of biodiesel and their number is increasing. 4) Is there any change in performance of engine by using biodiesel: If you are using B20 there is hardly any change in the performance of the engine. However, as the proportion of biodiesel increases in the blend, there are some changes in the performance. 5) Can biodiesel be used in cold weather: As the atmospheric temperatures decrease issues of proper blending of B20 become more critical and the fuel’s sensitivity to variations in the process of manufacture increase. If the content of biodiesel in the blend is less than 5%, there is small change in the cold flow properties of the blended fuel. 6) Will the filters work properly: The amount of solvent in the biodiesel blend increases as the proportion of biodiesel increases. Thus B100 has higher solvent effects and has greater tendency to clean vehicles fuel system and could release the deposits accumulated previously on the walls of the fuel tank. This may clog the filters in initial days, so you should be proactive with checking and replacing the filters. Once all the previous deposits are removed you can follow your old maintenance schedule. 7) Are there any long-term effects on the engine: No long-term effects on the engine have been observed. However, B100 can affect the properties of some elastomers and natural rubbers over a time that can affect hoses, piping and fuel seals. 8) What are the environmental benefits if using biodiesel: The use of biodiesel reduces emissions of unburned hydrocarbons (HC), carbon monoxide (CO), sulfates, polycyclic aromatic hydrocarbons, nitrated aromatic hydrocarbons and particulate matter. As the proportion of biodiesel increases in the blend greater environmental benefits are obtained. The use of biodiesel also reduces release of greenhouse gases. 9) Are there any tax benefits of using biodiesel? Some tax benefits are available to biofuels blenders and retailers.
questions. Here then are the most frequently asked questions: 1Q. Does biodiesel gel in certain temperatures? 1A. Biodiesel manufactured from soy has a cloud and pour point of approximately 32F while yellow grease and tallow ranges in the fifty degree area. When blending biodiesel manufactured from any feed stock it is equally important to access the best base stock (relating to cold properties) with your biodiesel. (Technical) 2Q. How much sulfur is in biodiesel? 2A. Virtually none. (Technical) 3Q. Are there specifications for biodiesel that can be compared against diesel fuel specifications? 3A. Yes, compare ASTM D 6751 (biodiesel B100 specification) with ASTM D 975 (generic diesel fuel specification). You can find a biodiesel typical specification by clicking the biodiesel basic icon found on the bottom of either the Ask Ben website or NBB website. (Technical) 4Q. What has been done to keep biodiesel blends flowing in the cold weather months? 4A. Whereas fuel additives are not effective in neat biodiesel our outreach and communication efforts have included recommendation on adhering to appropriate storage, blending and distribution efforts. These recommendation include keeping the biodiesel heated to a minimum of ten degrees above the posted cloud point of the biodiesel while ensuring that the diesel fuel which it is blended is both additized and blended with kerosene to meet the expected low temperatures of the specific market which the product is being handled and sold. (Technical) 5Q. How many bushels of soybeans are required to manufacture one gallon of biodiesel? 5A. 1 bushel equals 1.5 gallons of biodiesel (Other) 6Q. Have any oil burner manufacturers certified biodiesel for use in their products? 6A. At this time no oil burner, boiler or fuel pump manufacturer has approved biodiesel for use in home or commercial oil applications. However with several years of field and laboratory studies well documented the National Oilheat Research Alliance organization has continued to embrace an inclusion of 5% biodiesel as a blend stock into number two heating oil. The inclusion of biodiesel in heating oil has no drawbacks relating to combustion however in storage higher percentages of biodiesel has a similar drawback such as expeditious cleaning of dirty oil tanks, sedimentation formation from copper lines which are common throughout the heating oil industry and seal compatibility in the oil burner sealing compounds. At this time the National Biodiesel Board is working closely with NORA, burner, boiler and pump companies to arrest each of their concerns enabling safe usage of biodiesel as a heating oil blending stock. (Technical) 8Q. I am a petroleum marketer, is there any incentive or credit to encourage me to start up a biodiesel program in my area? 8A. At this time the biodiesel mixture credit affords blenders of record a distinct credit of $1.00 per gallon for agri-biodiesel and $0.50 per gallon for recycled oils (yellow grease) once blended into on- or off-road diesel. This type of program will assist you in recovering any costs associated with preparing for distribution. Beyond this federal credit you should contact your local government to see if there is any specific biodiesel legislation in your state which may be beneficial to your potential intervention with biodiesel. Finally, biodiesel affords you an opportunity to offer your customers a cleaner burning environmentally friendly liquid fuel option which would enhance your total offering to your valued customers. Visit www.biodiesel.org to learn more about the exciting biodiesel industry. (Other) 9Q. What if any additives can I add to biodiesel to keep it from gelling this winter? 9A. Conventional fuel additives you have become dependent on just don’t perform with B100. My recommendation for attaining winter operability success with biodiesel is to start with the absolute best winterized generic fuel with an additive and kerosene if necessary in conjunction with your biodiesel. Just remember a 20% blend of soy biodiesel will impair the blend by only 2-7 degrees Fahrenheit, so work, with the base stock and you will avoid any operational problems. One other note is keep your systems free of water, both bottom water and entrained. As you might be aware water freezes at 32F so you may have great diesel fuel cold flow properties and the fuel still could cause issues if your water is not controlled. (Operational) 10Q. What is transesterfication? 10A. It is the refining or processing method which raw soybean oil or other feedstock’s are taken and processed in ASTM D 6751 biodiesel. Biodiesel can be manufactured from vegetable oils, recycled cooking grease, or animal fats. These feedstocks are reacted with methanol in a chemical reaction called transesterfication to form fatty acids methyl esters (FAME). The various feedstocks’ can contain up to 14 different types of fatty acid chains with specific fatty acids and their proportions varying with feedstock (Production) 11Q. Do you have any information on the cost of producing biodiesel and on setting up the production facilities? 11A. Assistance with plant technology/production is outside the scope of NBB activities and we normally recommend that a company contact a biodiesel technology firm, like the ones listed below, for further assistance:
Biodiesel Industries (877-246-3835) 12Q. What is the minimum and maximum flash point of B20? 12A. The definition of flash point is the lowest temperature at which the application of the ignition source causes the vapors above the liquid to ignite. Biodiesel flash point can be close to 300F but has been as low as 200F. Diesel fuel on the other hand is rated to be 140F. To determine the actual flash point for B20 you would have to average the blends accordingly or better yet, have the sample professionally tested once blended to determine or validate your calculations. Any ASTM testing laboratory can perform flash point testing. (Technical) 13Q. What is the truth about seals…does everything need to be Viton? 13A. B100 will have a negative impact on Buna and Nitrile seals however Teflon and Viton are more suitable for higher to neat blends. If you plan on using biodiesel at 20% or under you most likely will have negligible headaches with sealing compounds. I would suggest that you click biodiesel basics at www.biodiesel.org for a complete listing of recommended elastomer. (Technical) 14Q. How do you make biodiesel? 14A. Click biodiesel basics, then production, a complete description of transesterfication with schematics are available. (Production) 15Q. Are there any emission studies of biodiesel blended with ultra low sulfur diesel? I wish to know how biodiesel effects emissions on ULSD. 15A. Because ULSD is still not readily available throughout the nation testing documentation with this blend is probably not readily available. I would suggest visiting www.biodiesel.org and using the advanced search engine on the site to seek this type of data, if available. Other than the reduction in sulfur oxides you could really depend on all the testing currently available with 500 ppm sulfur fuel currently in the markets which you operate. 16Q. What is the best method to test for storage stability of a B20 blend? Does the acid value number tell you anything useful for B20? What would a typical B20 acid number be? 16A. Fuel aging and oxidation can lead to high acid numbers, high viscosity and the formation of gums and sediments that clog filters. If the acid number, viscosity or sediment measurements exceed the limits in ASTM D 6751, the B100 is degraded to the point where it is out of specification and should not be used. Most B20 fuel could be a candidate for use of stability additives if fuel is being stored in excess of six to eight months. As biodiesel and biodiesel blends are stored the acid number tends to increase and go out of specification, gums and varnish can form and the viscosity can increase. The ASTM standard to evaluate acid value is ASTM D664 and Kinematic Viscosity, ASTM D445. 17Q. Does the NBB have recommendations on which additives work best with biodiesel for cold flow and for storage stability? 17A. Although companies continue to tout additives that work effectively on biodiesel and biodiesel blends NBB hasn’t been provided analytical data on any additive to formulate an opinion, nor would NBB endorse any. NBB works closely with the nations largest additive manufactures. 18Q. What can you tell me about micro-organisms and biodiesel fuel? Does it cause black, stringy gunk in a fuel tank? How can it be avoided? 18A. I can tell you that if you keep your fuel systems (diesel fuel, kerosene and biodiesel fuel) free of water then you will have no incidence of microbial contamination. Before bugs can become an issue water must be present along with warmer temperatures. For the record biodiesel is no more an incubator for microbes than any other fuel left unprotected from water contamination. Water can enter through the vent cap, in the fuel itself and through the delivery process. Micro-manage your fuel for water before and after each delivery and execute at a bare minimum quarterly fuel management program which will help you have a positive experience with your liquid fuels in general. 19Q. Recently two purchases of B20 in the Denver area marked B20 were not biodiesel, only generic diesel. Where is the standards process at this time? Dealer was subsequently stripped of all B20 signs by the suppler. 19A. It is unfortunate that you have experienced this situation. BQ9000 which is the biodiesel quality certification program is voluntary as you may be aware and at this time only one registered fuel supplier has committed to applying for certification. It appears with the tax incentive now in place you will see more and more suppliers taking the initiative to follow this supplier lead. With many years of petroleum experience behind me I must advise you that the BQ9000 program like ASTM D 975 quality standards is just one element of our industry that you must be cognizant of. The fact is you can have two fuels meeting quality specifications but are not blended properly which was the case in this circumstance which is just plain embarrassing. My suggestion is that you work cooperatively with your suppliers to make sure they are aware of BQ9000 protocols and work towards adhering to them. Human nature plays a big role in this probably as much as accessing quality diesel fuel or biodiesel. Good work in observing what you did and I’m sure you will see marked improvement from the mutual industries that offer biodiesel to the end-user. (Operational) 20Q. Can you tell me the problems with B100 and yellow metals? Are there any modifications someone can make in order to run it in your home heating oil system? 20A. Use of tanks or lines made of brass, bronze, copper, lead, tin or zinc may cause high sediment formation and promotes filter clogging and is not recommended with B100 or for that matter generic heating oil as well. This is why additive companies are including metal deactivators in premium heating oil packages to tie up the yellow metals so as not to accelerate corrosive act ivies within the storage tanks which the fuel is stored. Blends of 5% up to 20% are less of an issue but this is one area that NBB is working on to evaluate the impact of yellow metals with biodiesel. Unless you are prepared to pretty much change your oil lines from copper to stainless, your fuel pump seals to Viton or Teflon I would suggest sticking with B5 as a minimum to a max of 20% biodiesel. There is a comprehensive overview of heating oil and biodiesel at www.biodiesel.org for your review. 21Q. I have heard that biodiesel has 300 percent more lubricity than petroleum diesel. Is this true and if so where can I get information sources to back it up? 21A. Biodiesel is a well known lubricity enhancer. Go to www.biodiesel.org and type in lubricity and you will be recipients of reams of data on the subject. Small amounts of biodiesel as low as 2% can increase a fuels lubricity up to 65%. It is being positioned as a future lubricity additive for the new ultra low sulfur diesel heading our way in 2006. 22Q. We have been told by some that biodiesel is more corrosive for storage tanks over time than traditional diesel fuel. Is this true and if so why? 22A. This is not true. Both diesel fuel and heating oil as well biodiesel independently or blended as one fuel are all susceptible to numerous fuel quality deficiencies. In short if fuel systems have water ultimately the diesel fuel user will face micro biologics, corrosive activity and fuel instability. The number one contaminant in fuel is water and it is very important that you make sure if water is in a fuel tank that you immediately get rid of it. Biodiesel is no more a driver in this phenonmeum than diesel fuel itself. For more information go to www.biodiesel.org and click “User and Handling Guidelines, 2004) publication which does a great job addressing issues such as this. 23Q. If we blend clear biodiesel into dyed diesel will it change the federal dye concentration specification? 23A. IRS regulations (26 CFR 48.4082-1) require that all non-taxed diesel and kerosene be dyed with the dye solvent red 164 (and no other dye) at concentration spectrally equivalent to at least 3.9 pounds of the solid dye standard solvent red 26 per thousand barrels of diesel fuel or kerosene or any dye of a type and in a concentration that has been approved by the commissioner. Without actually performing dye concentration or lack of it would be purely guess work which is strongly not recommended when dye concentration penalties are at stake. Bottom line all clear product necessitating dye be dyed and at the recommended IRS declared values as shown above. U.S. Congress extends biodiesel tax creditBy Erin Voegele
Web exclusive posted Oct. 8, 2008 at 11:05 a.m. CST
Certificate for Biodiesel. You must obtain and keep as part of your records a certification to you from the producer of the biodiesel. The certificate is required for any biodiesel fuel credit claimed. The certificate must identify the product produced and the percentage of biodiesel and agri-biodiesel in the product. If the producer of the biodiesel is also the taxpayer claiming the biodiesel credit, the certificate is required but lines 2-7 are not needed. See Model Certificate O in the Appendix. The Certificate for Biodeisel and, if applicable, Statement of Biodiesel Reseller must be attached to the first claim filed supported by the certificate or statement. See Model Certificate O and Model Statement S in the Appendix. If the certificate and statement are not attached to Form 720 because they are attached to a previously-filed claim on Schedule 3 (Form 8849) for the biodiesel, attach a separate sheet with the following information: · Certificate identification number. · Total gallons of biodiesel on certificate. · Total gallons claimed on Schedule 3 (Form 8849). · Total gallons claimed on Schedule C (Form 720). Tax liability. Persons who blend biodiesel with undyed diesel fuel to produce a blended taxable fuel outside the bulk transfer terminal system must pay the tax on the volume of biodiesel in the mixture when the mixture is sold or removed. Persons who blend biodiesel with dyed diesel fuel must meet the applicable dye requirements or pay the tax. See Form 720 to report this tax. You also must be registered with the IRS as a blender. See Form 637. How to claim the credit. Any biodiesel mixture credit must first be taken on Schedule C to reduce your taxable fuel liability for gasoline, diesel fuel, and kerosene reported on Form 720. Any excess credit may be taken on Schedule C (Form 720), Schedule 3 (Form 8849), Form 4136, or Form 8864. See Notices 2005-4 and 2005-62 for more information. Separation or failure to use as fuel. If the credit applied to biodiesel used in the production of a mixture, and you later separate the biodiesel from the mixture or do not use the mixture as fuel, you must pay a tax equal to the credit. Report this tax on Form 720. Fuel CreditThe biodiesel fuel credit consists of the straight biodiesel credit, the biodiesel mixture credit, and the small agri-biodiesel producer credit. If you sell or use biodiesel (not in a mixture) as a fuel, you may be eligible for a general business credit on your income tax return. The biodiesel mixture credit was discussed earlier. Certificate of Biodiesel. You must obtain and keep as part of your records a certification to you from the producer or importer of the biodiesel. The certificate is required for any biodiesel fuel credit claimed. The certificate must identify the product produced and the percentage of biodiesel and agri-biodiesel in the product. If the producer or importer of the biodiesel is also the taxpayer claiming the biodiesel credit, the certificate is required but lines 2-7 are not applicable. See Model Certificate O in the Appendix. The certificate, and Statement of Biodiesel Reseller, if applicable, must be attached to the Form 8864 for which the claim is made. See Model Statement S in the Appendix. Straight biodiesel credit. You can claim the credit for any biodiesel not mixed with diesel fuel. You are eligible for the credit for straight biodiesel only if you met one of the following requirements during the tax year. · You used it as a fuel in your trade or business. · You sold it at retail and placed it in the fuel tank of the buyer's vehicle. The credit is not allowed for biodiesel (including agri-biodiesel) you used as a fuel in a trade or business if that biodiesel (including agri-biodiesel) was sold to you in a retail sale described above. Small agri-biodiesel producer credit. If you are an eligible small agri-biodiesel producer, you qualify for a credit on up to 15 million gallons of your qualified agri-biodiesel production for any tax year. This additional biodiesel fuel credit is 10 cents for each gallon. You are an eligible small agri-biodiesel producer if, at all times during the tax year, you have an annual productive capacity of not more than 60 million gallons of any type of agri-biodiesel, including biodiesel not eligible for the credit. For a partnership, trust, or S corporation, the 15- and 60-million gallon limits apply at both the entity level and the partner, beneficiary, or shareholder level. Qualified agri-biodiesel fuel production. Your qualified agri-biodiesel fuel production is any agri-biodiesel you produce and sell during the tax year to another person for any of the following purposes. · Use in the production of a qualified mixture in that person's trade or business (except casual off-farm production). · Use as a fuel in that person's trade or business. · Sale at retail by that person who puts the agri-biodiesel in the fuel tank of the buyer's vehicle. It also includes your use or sale of the agri-biodiesel for these purposes. Cooperative election to allocate the small agri-biodiesel producer credit to patrons. A cooperative described in Internal Revenue Code section 1381(a) can elect to allocate any part of the small agri-biodiesel producer credit to patrons of the cooperative. The credit is allocated among the patrons on the basis of the quantity or value of business done with or for the patrons for the tax year. For more information, see Form 8864. Failure to use for qualifying purposes. If the credit applied to an eligible small agri-biodiesel producer and you do not use the agri-biodiesel for a purpose listed under Qualified agri-biodiesel fuel production, you must pay a tax equal to the credit. Report this tax on Form 720. How to claim the credit. You take the biodiesel fuel credit by completing Form 8864. All individuals and corporations taking the credit use Form 8864. Partnerships (including electing large partnerships), S corporations, estates, and trusts figure the credit on Form 8864 but divide the credit among their partners, shareholders, or beneficiaries. If you take the biodiesel fuel credit, you must include the credit for the tax year in your gross income for that year. Form 8864 is the only form on which you can claim the straight biodiesel fuel credit. Mixing or failure to use as fuel. If the credit applied to biodiesel you bought and you later mix the biodiesel or do not use it as a fuel, you must pay a tax equal to the credit. Report this tax on Form 720. Renewable Diesel CreditsRenewable diesel credit and renewable diesel mixture credit. Generally, the rules for the renewable diesel credit and the renewable diesel mixture credit are the same as the biodiesel credit (defined earlier) and the biodiesel mixture credit (defined earlier). However, the small agri-biodiesel credit does not apply to renewable diesel. Renewable diesel defined. For purposes of the renewable diesel credit or renewable diesel mixture credit, renewable diesel means diesel fuel derived from biomass (as defined in Internal Revenue Code section 45K(c)(3)) using a thermal depolymerization process that meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act, and the requirements of the ASTM D975 and D396.
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