Wednesday, January 25, 2012

National Biodiesel Board re: Selling Biodiesel

Thanks for writing.

As the national trade association for the US biodiesel industry, our expertise is not in the production side of the industry.  Production technology, plant development, business planning, feasibility studies are issues best serviced by the private sector.  NBB works primarily in the areas of biodiesel education and market development, and we strive to break down barriers while creating demand for US biodiesel.  For business consulting advice, technology providers, and other business-to-business services you can find some resources on the All Things Biodiesel (ATB) section of the NBB web site,

The issues associated with producing biodiesel commercially in the US include:

Registration with EPA as a biodiesel fuel producer: In the US, EPA governs fuel and fuel additive registration and anyone selling biodiesel must first be registered with them. The contact is Mr. Jim Caldwell and his number is (202) 343-9303.  See

In most cases, each fuel supplier must first be registered in the state in which the fuel is being sold and suppliers must be properly licensed, bonded, and insured. Contacting your local Department of Revenue is a good starting point.

Incorporated fuel quality assurance procedures to guarantee the fuel meets the current ASTM D6751 specification, available for purchase through ASTM at

Along with the ASTM standard for biodiesel, the industry also has in place a quality assurance program called BQ-9000. The program is a unique combination of the ASTM standard for biodiesel, ASTM D 6751, and a quality systems program that includes storage, sampling, testing, blending, shipping, distribution, and fuel management practices. For more information, see   Fuel quality is of the utmost concern and importance to the biodiesel industry.

Compliance with IRS Federal Fuel Excise Tax Regulations and any applicable state taxes.  Contact the IRS at (800) 829-3676 and your local State Motor Fuels Taxes Division for more information.

Feedstock sourcing/supply. 

Issuance of all applicable state permits for construction of the facility, building, operating, wastewater, spill containment, storm water pollution prevention, air quality permits, storage, state fire marshal, selling of product, etc. The actual number of permits required depend on the size and design of the biodiesel plant and other issues such as local requirements and methods associated with production processes. There may be as many as 20-30 permits involved in getting the plant operational. Given the number of permits, complexity of the forms, requirements that can vary from state to state, and level of technical information required, you might consider working with a consultant familiar with environmental permitting in your state and an area economic development director.

Adherence to local zoning laws with regard to storing hazardous chemicals, air quality emissions, and/or construction of a facility. Contact your local state Department of Environmental Quality.  Also, see for more information about environmental regulations, including glycerin disposal.

IRS and state blender's permitting/registration requirements. We encourage you to contact the excise tax division of your state department of revenue for more specific information on any requirements they may have. All producers and blenders need to register with the IRS under Form 637. Producers of biodiesel, if planned for on-road use, should also contact EPA regarding registration as a refiner, per the ULSD rules.

Understanding and meeting the compliance requirements of the Renewable Fuels Standard Program will be extremely important.  EPA has developed a website specific to the RFS, as well as Q&A documents to assist in meeting compliance requirements.  The following link provides more information

Insurance Issues. Do I warrant my biodiesel to the extent that will pay for any and all damages attributable to bad biodiesel?

For more information, refer to 40 Code of Federal Regulations (CFR) Part 79 regarding requirement of registration. Sections 211(b) and 211 (e) of the Clean Air Act require producers of fuels and fuel additives to be registered with EPA. Those provisions require that in order to register a fuel with EPA, that it must complete Tier I and Tier 2 health effects testing requirements. The provisions also allow individuals to form a consortium in order to complete the testing requirements as a group. NBB completed the testing at a cost of $2.2 million dollars. Prospective registrants can join as members of the NBB, for which access to health effects data is provided free to its members, as long as the member remains in good standing. There are many benefits to joining NBB besides obtaining EPA Health Effects Access.  For more information about membership, contact Doug Whitehead at (800) 841-5849.

For possible grants to help with plant development, we normally suggest trying: USDA Rural Development, USDA Conservation Security, US EPA West Coast Initiative, USDA Value Added Producer Grants under the Rural Business Cooperative Program, USDA NRI Grant Program, US EPA, US Department of Energy, your local Regional Biomass Energy Program, Clean Cities, and your local Energy Program, Department of Commerce, Department of Agriculture, and Department of Economic Development. To check on state incentives or programs, a good place to go is to the state's legislature home page and search laws, bills or statutes related to biodiesel.  The following websites provide some information as well

For listings of current biodiesel producers, marketers, distributors, and retailers, see the NBB website at under Buying Biodiesel.  

National Biodiesel Board
PO Box 104898
Jefferson City, MO 65110-4898

For information about our 2012 National Conference and Expo, see

Biodiesel:  America’s Advanced Biofuel

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