Biodiesel is a renewable fuel produced from animal and vegetable fats that can be used in diesel engines with little or no modification. Biodiesel is typically blended with petroleum diesel in formulations referred to as B2 (two percent biodiesel, 98 percent petroleum diesel), B5 (5 percent and 95 percent), B20 (20 percent and 80 percent), etc. Though biodiesel is most commonly used in these kinds of blends, it can also be used in its pure form (B100). Biodiesel can be used in virtually any diesel engine without modification. It can be used in its pure form (called B100) or as a blend with diesel fuel at any ratio. The most commonly used form of biodiesel is a 20% blend of biodiesel with 80% petroleum diesel, known as B20. This has become a common practice as a balancing of benefits with costs, cold weather and solvency considerations associated with biodiesel. More on these below.) Biodiesel provides similar horsepower and fuel economy as petroleum diesel with superior lubricity to reduce wear and tear on the engine.

Biodiesel runs in any unmodified diesel engine. There is no engine conversion typical of other alternative fuels. The diesel engine can run on biodiesel because it operates on the principle of compression ignition whereby air is compressed and then fuel is sprayed into the ultra-hot, ultra-pressured combustion chamber. Unlike gasoline engines, which use a spark to ignite the fuel/air mixture, diesel engines actually use fuel to ignite hot air. This simple process allows the diesel engine to run on thick fuels. Since biodiesel is chemically similar to petroleum diesel fuel, you can pour biodiesel right into the fuel tank of any diesel vehicle. Biodiesel has many advantages as a transport fuel. Biodiesel has lower emissions, it is made domestically (which increases national security), it does not affect engine performance and biodiesel is produced from plants.

Biodiesel is registered as a fuel and fuel additive with the Environmental Protection Agency. The Departments of Transportation and Energy recognize biodiesel as an alternative fuel. An ASTM standard, D6751, has been developed to ensure biodiesel quality. Diesel vehicles has driving more than fifty million miles on biodiesel fuel in the United States, even more in Europe.

Northeast Biodiesel Company is a biodiesel plant in Greenfield Massachusetts designed to produce 10 million gallons of biodiesel for diesel vehicles and oil heat systems using recycled vegetable oils and animal fat as the primary raw material. It will initially produce five million gallons per year. Construction will begin in 2008 on the $7 million production facility. The Ralston, Iowa-based company is planning to raise up to $150 million in an IPO according to regulatory filings with the SEC on Monday. REG boasts that it is one of the leading biodiesel producers in the United States, with an output of about 78 million gallons of fuel in 2006. REG is not the only one to cash in on the clean-craze.

Midwest Biofuels, 125 Industrial Drive, is about to become the second plant in Wisconsin to produce biodiesel commercially. It will be the first completely indoor biodiesel producer in the world and one of the first in the nation to use a waterless method of turning soybean oil into diesel fuel. Imperium is expecting to complete construction on its Port of Grays Harbor facility on the coast of Washington state in July, 2007. When complete, the facility will have the capacity to produce up to 100 million gallons of biodiesel per year, making it the largest biodiesel production facility in the United States. The company is using the proceeds from the Series B round to begin planning for up to three additional similarly sized facilities across the country and around the world. The combined facilities will be designed to produce up to a total of 400 million gallons, or about 10 million barrels of biodiesel, per year by the end of 2008.

Crescent Biodiesel will use soy, sunflower, peanut, cottonseed and palm oil to produce biodiesel fuel. South Carolina farmers will have the first opportunity to supply the crops needed for raw materials. About a year after it?s open, Crescent Biodiesel?s plant is expected to produce 25 million gallons of fuel a year, Mr. Phillips said.

Biodiesel is a renewable fuel that is blended with or replaces petroleum diesel. With Biodiesel, any diesel engine can become a renewable fuel engine. Biodiesel is made in the USA from vegetable oils, animal fats, and used restaurant grease. The raw materials used to make Biodiesel are grown by America’s farmers, many of whom are already running on it, and have been for years. Biodiesel is safer to use, handle, and store than petroleum diesel. Biodiesel is less environmentally damaging to produce, and cleaner at the tailpipe. Plus, it is less damaging if it spills on the ground or in water.

BQ-9000 is a quality assurance certification program that includes procedures for fuel storage, handling and management aimed at ensuring fuel quality throughout distribution. There are two categories: certified marketer and accredited producer. Although there are more than ten accredited producers, Sprague Energy is only the second company to become a certified marketer. The other is Peter Cremer, an Ohio-based biodiesel manufacturer.

One of the industrys pioneer biodiesel producers has announced a company makeover and the largest planned biodiesel expansion in the history of the industry. In August, Renewable Energy Group, Inc. (REG) announced completion of a $100 million private equity financing and two new strategic partnerships. The company has said its overall biodiesel production will reach approximately 640 million gallons by 2009, including third-party plants.

Buoyed by President Bush’s plan to reduce gasoline consumption by 20 percent in the next 10 years and growing consumer demand for alternative fuels, venture capitalists and private equity firms are tossing hundreds of millions of dollars into alternative energy companies. Last year, an estimated $740 million flowed into ethanol, methane and biodiesel startups — a sevenfold increase over 2005 levels, according to the Cleantech Group.

Ethanol producers Cilion and Altra scored more than $150 million in financing last year, while Ralston, Iowa, biodiesel producer Renewable Energy Group pulled in $100 million. Meanwhile, the National Biodiesel Board reports that there are 105 biodiesel plants in the U.S., with a total production capacity of 864 million gallons. That could increase by 1.7 billion gallons in the next 18 months if all the plants in development are built.

Gary Haer, vice president of sales and marketing at Renewable Energy Group, said his company plans to open three plants in Iowa this year. Deriving fuel from Midwest soybeans, those three plants alone would add 90 million gallons of biodiesel capacity. Last year, Renewable Energy Group’s production stood at 72 million gallons — making it one of the largest in the country. By 2009, the company hopes to be producing 600 million gallons.