Massachusetts Backs Off 2% Biodiesel Mandate

Massachusetts has indefinitely suspended a 2% biodiesel mandate for fuel and heating oil that was to take effect this month, saying that without the federal tax credit for the producers, the cost of biodiesel would be too high for consumers.

Until January when the tax credit expired, biodiesel producers received a $1 tax credit per gallon designed to make biodiesel prices competitive with diesel fuel. Legislation to renew the tax credit has stalled in Congress.

According to state officials, their estimates are that, minus the tax credit, the mandate would have put the cost of biodiesel 3 cents higher per gallon than that of regular diesel.

Officials at the National Biodiesel Board said the state estimates are wrong, that with the mandate the cost of biodiesel, even without the tax credit, would have been about a penny higher than regular diesel.