Biodiesel in crosshairs of lawsuit against Minnesota’s B10 blend mandate

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The Minnesota Trucking Association, with a coalition of vehicle- and fuel-industry organizations, on Friday, April 17, filed a lawsuit in U.S. District Court challenging the state of Minnesota’s mandate of a 10 percent biodiesel blend for diesel sold within its borders. Put in place last summer and unique among states around the nation, the mandate requires all diesel sold in the state through the months of April-September to be a B10 blend. In 2018, if certain conditions are met, the law would then push the percentage up to 20 by requiring a B20 blend.

Plaintiffs contend the mandate “denies consumers in Minnesota access to the diesel fuel recommended for most diesel passenger vehicles and light trucks,” typically up to B5, while also “likely raising fueling costs for all diesel vehicles, including those heavy trucks that can accommodate higher blends,” noted a release issued by the MTA. The suit alleges that the B10 mandate is in direct conflict with the federal Renewable Fuels Standard and that Minnesota is operating outside its authority in requiring B10.

Included in the filing, which you can download in full via this link, is testimony given by Kottke Trucking head Kyle Kottke. The company operates 40 company trucks and leases 50 owner-operators, Kottke notes, going on to describe the price differential the company saw last year as the B10 mandate in Minnesota went into effect.

“I consistently see higher prices for the diesel/biodiesel blends sold by fuel providers in Minnesota when compared to the diesel fuel sold by the same fuel provider outside of Minnesota,” Kottke says.

He and the company compared chain fuel retailers’ prices for fuel bought in July of 2014 in Minnesota and in neighboring states of Iowa, Wisconsin and South Dakota, finding a 3 cents/gallon premium in Minnesota-bought fuel: “Because the cost to Kottke Trucking under its contract with the [fuel retailer’s] owner is the same at either station (cost plus a fixed margin per gallon), I attribute the pre-tax price differential for fuel sold in Minnesota to Minnesota’s B10 mandate.”

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Joining MTA and its members were the Minnesota Automobile Dealers Association, the Alliance of Automobile Manufacturers, the American Petroleum Institute and the American Fuel & Petrochemical Manufacturers. Named defendants in the suit were Minnesota’s Pollution Control Agency and Departments of Agriculture and Commerce.

With its filing, the coalition issued the following statement:

“Given that the average age of a motor vehicle in Minnesota is 11.2 years, the State’s Biodiesel Content Mandate causes significant risk of harm to consumers and a broad range of businesses, since most diesel-fueled passenger cars and light trucks were not designed for — and are not warranted to run on — biofuel blends of 10 or 20 percent.

“Use of such fuel blends could result in increased maintenance costs and engine problems for certain vehicle owners. These problems could impact manufacturers and dealers in the state through lost sales and increased warranty claims.”

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