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Biodiesel is registered with the Environmental Protection Agency as a pure fuel or as a fuel additive and is a legal fuel in commerce. It is typically produced through the reaction of a vegetable oil or animal fat with methanol in the presence of a catalyst to yield glycerin and biodiesel (chemically called methyl esters). It is an alternative fuel that can be used by itself or blended with petroleum diesel for use in diesel engines. Its use can result in substantial reduction of unburned hydrocarbons, carbon monoxide, and particulate matter. Provisions of the Energy Conservation Reauthorization Act of 1998 (ECRA, P.L. 105-388) amended the Energy Policy Act of 1992 (EPACT, P.L. 102-486) to allow that the use of biodiesel added to conventional diesel at blends of 20% and higher would produce credits to offset up to 50% each year of alternative fuel vehicle acquisition requirements. Farmers and processors anticipate that increased use of biodiesel will strengthen the market for soybean oil.

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