Biofuel buzz fizzles

Swanton's Biocardel Vermont hits series of obstacles

By Dan McLean, Free Press Staff Writer • September 13, 2009

With the national biofuel boom fading, a major player in Vermont’s nascent commercial biodiesel industry has failed to meet projections.

Despite setbacks, producers and advocates continue to push forward on different types of biofuels. They are being forced to adapt to changing interpretations of what constitutes a viable “alternative fuel” and readjusting to slumping fuel demands from the global recession.

“The projections were timed wrong. ... Unfortunately, the road we were looking down, we didn’t see some of these things coming around the corner,” said Stephen Daigle, manager of the Swanton plant.

The Canadian-backed enterprise, which has received tax incentives and a low-interest loan from the state, has yet to sell one gallon of its fuel to customers in Vermont, Daigle said. The facility, formerly a fertilizer plant, has produced 50,000 gallons of biofuel that sold in Canada, he said.

“It took us a huge volume of time, a lot longer than anyone expected, to do the R&D for this,” Daigle said.

After 400 test batches, Biocardel Vermont has been ready to produce high-quality, soy bean-based biodiesel for the past 14 or 15 months, Daigle said. But the global recession and fluctuating commodity prices have proved problematic. Now, it’s unclear whether the Environmental Protection Agency will sign off on soy bean-based fuels as a workable alternative fuel.

The EPA has issued a draft ruling that “has the potential to exclude huge volumes of biodiesel from counting as ‘alternative,’” said Jessica Robinson, spokeswoman for the National Biodiesel Board in Jefferson City, Mo.

Sensing the changing perceptions, Biocardel Vermont has spent recent months developing a marketable recipe for used vegetable oil-based fuels. Biocardel hopes to sell 6,000 gallons of its used-vegetable oil recipe next week in Vermont, he said.

The plant is ready to produce either type of biodiesel: based from soy bean or used vegetable oil, Daigle said. And the company is also considering algae-based biofuels.

Falling demand

The economy, which has been mired in a deep recession since December 2007, sapped demand for shipping. So fewer trucks and trains have filled up on fuels blended with biodiesel.

The National Biodiesel Board projects 400 million gallons of pure biodiesel, known as B100, will be sold in 2009 — a hefty drop from the 690 million sold in 2008, Robinson said.

“We estimate that about one-third are either idle or have dramatically reduced production,” she said of the biodiesel-producing plants in the U.S.

Netaka White, biofuels director for the Vermont Sustainable Jobs Fund in Montpelier, said the biofuel boom has been sputtering recently, but he is confident it remains an essential fuel for the future.

“The upward curve has not been sustained. I do believe that is temporary because we cannot continue to use fossil fuels at the rate we’re using them ... and the only viable alternatives are going to be biofuels,” he said.

As executive director of the Vermont Biofuels Association, White projected 750,000 gallons of pure biodiesel would be consumed in Vermont in 2007. The actual tally, he said Thursday, was 378,000 gallons.

Consumption rose modestly to 392,000 gallons last year, White noted. Small-scale, farm-based operations have continued with soy bean-based fuels and should continue to grow over the next decade, he said.

“I don’t think soy biofuel is dead,” White said, but a new analysis considering the carbon output to produce the soy has tarnished its appeal as an alternative energy. “This type of analysis is what is driving the debate on what are the good biofuels and which are the bad biofuels.”

Politics will play a part in determining which types of biofuels are embraced.

“Those decisions will be made in Washington. They are political or policy decisions,” White said.

Tax credits are responsible for keeping the price of a gallon of biodiesel reasonably competitive: about 10 to 20 cents more a gallon than conventional diesel, Robinson said. The credits, though, expire Dec. 31, and it’s uncertain whether they will be reauthorized by Congress.

No rush

There is no rush to turn a profit at Biocardel Vermont, Daigle said. Instead, the company — formed by Biocardel Inc. and Guilmax Inc., both Canadian firms — wants to ensure the product is high-quality.

“I can tell you I have never heard any falter from our investors, that we can’t do this one month longer,” Daigle said.

The Wall Street Journal reported late last month that “dozens of other new biodiesel plants, which made a diesel substitute from vegetable oils and animal fats, have stopped operating because biodiesel production is no longer economical.”

Vermont has also offered tax incentives and a low-interest loan to help the company get started. In 2006, the Vermont Economic Progress Council pledged $534,522 in payroll and capital investment tax credits, and the Vermont Economic Development Authority issued a $645,355 low-interest loan.

“I know Biocardel got a late start, but they have invested in a plant and have started to hire. What I don’t know is whether they have met performance expectations, filed any claims for the tax credits, or earned any credits yet,” Fred Kenney, executive director of the Vermont Economic Progress Council, said by e-mail.

The company expected to create 21 jobs by August. The Swanton plant, however, remains lightly staffed. Aside from the plant manager, there are two employees, Daigle said. Biocardel says it’s hiring up to five more workers.

“What we have built over this three years is really a huge confidence in what we can now do,” Daigle said.

“We are ready to take the next corner. I’d like to produce — and get some biodiesel out into Vermont,” the plant manager said.

Contact Dan McLean at 651-4877 or This email address is being protected from spam bots, you need Javascript enabled to view it .

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