Biofuel starts new year with a thud

Biofuel loses rich government tax credit, takes a nosedive in U.S.

Oops, could this be a second bad year for biofuel in America? A dollar/gallon US government tax credit for biodiesel has expired and that may signal shutdowns across the industry. Here's the story of one Texas biofuel plant, shutting down one year after it opened.

Europe is the major user of biodiesel but began putting a tariff on all American imports last March. That was a hard blow for American exporters. Now European biodiesel protectionists are aiming their guns at Argentina which has increased its European exports by a factor of 20 in a single year. Major biodiesel producers in Europe: Germany and France. And both nations have excess production capacity at this time. Biodiesel is a major fuel in Europe where a majority of even passenger car are diesel-powered, not gasoline.

Biodiesel can be made from used vegetable oils. Ethanol, which is mixed with gasoline, can be made from many raw materials. In the U.S. that's often corn. One attraction of biofuel is its lower emissions when burned.