Minnesota, which was the first state to mandate biodiesel, will increase the state's current 2 percent biodiesel mandate to 20 percent by 2015.

According to the legislation signed this week by Gov. Tim Pawlenty, the current 2 percent biodiesel mandate will increase to 5 percent on May 1, 2009; to 10 percent on May 1, 2012; and to 20 percent, or B20, on May 1, 2015.

"Implementation of the legislation starting in May of 2009 is timely and workable," said Chuck Neece, chairman of the Minnesota Biodiesel Council, which championed the legislation. "The supply from the current biodiesel production capacity in Minnesota already exceeds 64 million gallons, more than enough to meet the five percent requirement, which would be 40 million gallons."

The increases are not automatic, however. There is built-in flexibility, including an approval process before moving to higher blends. This will allow the legislature, biodiesel producers and other stakeholders to gauge supply and demand impacts before moving to a higher blend.

When Minnesota's 2-percent biodiesel mandate first went into effect in 2005, there were so many problems reported of fuel filter plugging and other issues that the mandate was suspended for several weeks while producers tried to isolate and address the issue. The problem turned out to be quality issues with some batches of biodiesel. The new legislation includes quality assurance and national ASTM fuel specifications.

"Minnesota has led the nation in unleashing a renewable energy revolution," Gov. Pawlenty said when he introduced his proposal earlier this year. "Other states are starting to catch on and it's time for us to continue to blaze the trail to a cleaner, more secure energy future. Increasing the level of biodiesel in diesel fuel means that more of our energy will come from farm fields rather than oil fields and that's a good thing."