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Biodiesel Economics

What's really driving the biodiesel business today isn't environmentalism or concerns about reliance on foreign oil. It is economics.

PRODUCERS: The 2002 Farm Bill provided federal subsidies of up to $150 million a year total to biodiesel and ethanol refineries. That program is slated to end in 2008.

BLENDERS: A federal jobs bill that took effect in 2005 gave companies that mix agriculture-based biodiesel with regular diesel a tax credit of a penny per percentage of biodiesel. For example, making B99 would get a tax credit of 99 cents per gallon. Biodiesel made with waste cooking oil only gets a half-cent per percentage of biodiesel.