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Published May 01, 2009, 08:26 AM

Higher biodiesel mandate takes effect in Minnesota

A new requirement to jump-start the struggling biodiesel industry has taken effect in Minnesota. Effective today, all diesel sold in the state must contain at least 5 percent of the alternative fuel, which is made mostly from soybean oil.

By: Associated Press,

ST. PAUL — A new requirement to jump-start the struggling biodiesel industry has taken effect in Minnesota.

Effective today, all diesel sold in the state must contain at least 5 percent of the alternative fuel, which is made mostly from soybean oil.

Minnesota was the first state to require biodiesel when a 2 percent mandate took effect in 2005. Now that's up to 5 percent. The mandate will rise to 20 percent by 2015.

The big profit margins the biodiesel industry enjoyed in earlier years have disappeared. The cost of soybean oil is too high and the sale price of biodiesel is too low.

Skepticism over how the fuel performs in cold weather is another hurdle facing the industry. Biodiesel backers say any diesel fuel, whether bio or petroleum, can gel if the precautions aren't taken.

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