WINDSOR, Conn. --- A growing number of state governments have adopted initiatives aimed at promoting use of biodiesel fuel, according to a report in the Windsor Journal. Most vehicle engines that operate on conventional diesel can operate on biodiesel without any modification necessary. The state of Connecticut has entered into a $400,000 biodiesel contract for Department of Transportation trucks through January 2007. The contract stipulates that municipalities and other political subdivisions of the state can purchase biodiesel under the same terms as the state. For its biodiesel, the state is now paying a premium of 50 cents per gallon over the price of conventional diesel. In March of last year, the University of Connecticut published a study that concluded the state could save $20 million or more in health care costs by switching to biodiesel for space heating and heavy vehicle use. The study also found that the fuel is nontoxic, doesn't irritate skin, degrades four times as fast as conventional diesel, and is safer to store and handle than conventional diesel because of a much higher flash point. By December 2005, 16 additional states were providing biodiesel production subsidies or incentives. Arkansas, for example, has an income tax credit for biodiesel suppliers, while Kentucky offers an income tax credit of $1 per gallon for biodiesel producers and blenders.

Originally posted on Fleet Financials