Growing the Biodiesel Business with Proven Results

When Ag-Land FS, Inc., began marketing biodiesel blended fuel in 2002, they knew they needed to provide data and prove to farmer members that biodiesel was a viable alternative.

“We did not want to come into the marketplace until we actually took biodiesel into the field and put it on trial,” says Kevin Lockart, energy consultant with Ag-Land FS. “So we did some testing with the Greater Peoria Mass Transit District that proved biodiesel blended fuel was a viable option for our commercial and agricultural customers.”

Once that test proved successful, the transition was easy and customers were excited about the potential of biodiesel.

Economic benefits help convince customers. 

In addition to supporting local farmers and reducing greenhouse gas emissions, biodiesel gave Ag-Land FS customers a significant economic edge. In Illinois, the sales tax on transportation fuel can be up to 25 cents higher per gallon than taxes in neighboring states. But when a retailer offers biodiesel blends of B11 or higher, the biodiesel blended fuel is not subject to the additional sales tax.

“We began offering a B2 biodiesel blended fuel in 2002 and rapidly moved to offer a B11 blend to take advantage of the Illinois tax abatement,” says Lockart. “I must admit it wasn’t an easy transition, and it took a lot of work, but looking back it was worth the effort. I estimate 95 percent of farmers in our trade territory utilize a B11 or higher biodiesel blended fuel today.”

By passing the tax savings on to their customers, Ag-Land FS was able to increase their market share beyond the agricultural industry. The Greater Peoria Mass Transit system has been using biodiesel blended fuel for the past 10 years, as well as several other over-the-road trucking fleets in the Peoria area, ranging from five to 500 trucks. Many of these Ag-Land FS customers have experienced increases in mileage using biodiesel blends — up to 6.5 percent with on-road trucks — particularly those that do a lot of stopping and going.