A proposal by Minnesota’s state legislature to mandate the use of biodiesel is drawing sharp criticism from a variety of groups, including trucking companies, railroads, airlines and truck stop operators.

The groups claim that higher diesel fuel prices, loss of fuel sales to surrounding states and possible fuel supply shortages will result from mandated biodiesel use in all diesel fuel sold in Minnesota. The legislation under consideration would mandate mixing soybean oil or vegetable oil derivatives, known as "biodiesel oil," in all diesel fuel sold in Minnesota beginning in 2002, and expanding the mandate in 2006.

The Minnesota House Environment and Natural Resources Policy Committee tabled the bill on March 20, but passed it a week later and referred it to the House Transportation Policy Committee.

“Biodiesel fuels have a promising future, but mandating the use of biodiesel is not the way to develop the industry,” said John Hausladen, president of the Minnesota Trucking Association. “The serious negative economic impacts a state mandate would have on consumers, main street businesses, farmers and other state industries should convince the state legislature to reject this proposal.”

A study conducted by the University of Minnesota claims that the proposed biodiesel mandate would increase the cost of diesel fuel sold in the state by $0.02 to $0.06 per gal, costing diesel fuel consumers and suppliers $16- to $48-million per year. The study also found that a state biodiesel mandate could increase the cost of airline fuel in the state by up to $0.09 per gal.

The National Association of Truck Stop Operators (NATSO) says cold weather can "cloud" or "gel" biodiesel to a greater degree than traditional fuel, greatly lowering truck engine performance. NATSO says increased concerns about biodiesel gelling in colder weather could also persuade purchasers to avoid Minnesota businesses in favor of fueling up in other states.