First, let me state categorically that I think your effort to educate consumers should be applauded. Yokayo Biofuels is doing a great service to this rapidly growing industry. However, I have trouble seeing the tax credit as anything but a good thing. It's not perfect mind you, but it is driving down prices considerably and inviting many new producers and blenders into the industry. Just because it doesn't help the 'mom-and-pop' operations, does not mean that it is damaging the industry. I'm sure you personally feel disenfranchised because you didn't earn a penny from the incentive. Again, bad for you but not for the industry necessarily. Let me elaborate by addressing your points one by one.

1) First, you should consider converting Yokayo Biofuels to an LLC instead of a partnership. Most all biodiesel producers (that I know of) that are any larger than a co-op, are LLC's. These type of corporations are easy (inexpensive) to start-up, and also limit the legal liability of the owners. And it would also enable Yokayo Biofuels to reap the income tax credit more easily.

Second, most major biodiesel producers are not petroleum companies. Big agriculture, maybe, I'll concede that, but not petroleum companies: see here for list. And just because major petroleum stations are selling biodiesel at their pumps does not mean they are producing it, more on this later.

Third, helping biodiesel become a big business isn't a bad thing. This contention may be met with the most resistance but I would argue that if biodiesel is ever going to become this pie-in-the-sky mainstream fuel, used prolifically across the country, that big businesses are going to have to be involved. It won't be because 100,000 Yokayo Biofuels crop up across the country, no disrespect intended. Big corporations and small producers alike are needed to bring the necessary supply, marketing, and education to the marketplace, this is a reality that staunch biodiesel advocates need to face.

2) Selling B99 isn't a bad thing. If petroleum companies get in on the action and the supply of B99 increases around the country, simple supply and demand dictates that prices will go down. So not only is a new mixture credit available, supply may go up as a result, further driving down prices at the pump. I wish it was B100 as much as the next guy but if it reduces costs for blenders and distributors, I'm having trouble seeing a problem with it.

3) I think we both agree that this income credit for "agri-biodiesel" is pandering to the farm lobby, but the perfect is the enemy of the good. While WVO isn't as well supported, it is still eligible for some tax credit and SVO eligible for the full credit. This is far better than no credit for biodiesel at all, or worse yet, for the petroleum industry instead. Bottom line is that it helps biodiesel, albeit SVO derived biodiesel more than WVO.

4) Biodiesel prices did go down significantly as a result of the incentive. My prices in Seattle dropped about $0.60 and more in other areas nearby. As far as I have read on the BiodieselNow and other forums, prices dropped around the country. What happened in California seems to be an aberration. If prices continue to rise because of demand pressure, then the industry will be profiting. Already we can assume that producers were able to take the full $1.00 credit so most are earning about $0.40 more per gallon than they were. Is this a bad thing, more profit for the biodiesel industry? This can only invite more capital investment and more startups. The prospect of big profits will provide an incentive for new producers to join the market. Competition will ultimately keep prices in check. If prices remain high after new producers join the market, that can only mean one thing, that demand is still high and countrywide production and consumption is growing. Again, I'm having trouble seeing how the growth of the biodiesel industry is a bad thing. More biodiesel users and more suppliers is good as far as I am concerned.

5) In principle, I agree with you on point 5. I also believe that incentives in general are a bad thing since they artificially distort true supply and demand. Petroleum prices for instance should be much higher but since they are heavily subsidized gasoline & diesel remain less expensive than biodiesel. I much prefer to let the free market sort itself out.

However, I don't necessarily think widespread corporate distribution of biodiesel is necessarily a bad thing for the industry. You seem to think this will adversely affect quality and drive people away from biodiesel. I'm not convinced of that. I think we both agree that there should be standards in place, and there are (ASTM) but most biodiesel problems arise not necessarily because of poor production methods, but from poor storage practices and failure to turnover tanks quickly enough. With larger scale production and distribution that only a big corporation can provide, many of these long-term storage concerns will be mitigated. Again, I think the role of Yokayo Biofuels to educate consumers is noble and invaluable to growth among the 'first-adopters' that now make up the market. However, I trust big petroleum companies with gasoline, for good reason. There are far more quality problems with fuel from smaller co-ops than there are with fuel from Exxon, Yokayo Biofuels being an obvious exception.

I actually agree with you on many points, this tax incentive doesn't support the most sustainable means of production and it doesn't help the smaller producers. It will grow the industry, just like incentives helped grow the solar power industry. However, it's a big assumption that 1) the incentive will go away, given the strong farm lobby, and 2) that more production equals lower quality. I don't think either of these assumptions are the case. Personally, I think you're bitter that the incentive didn't help you and other small producers and I earnestly sympathize with you. It's not fair and it's not right but I don't agree that it's bad for the industry, I think it's a necessary step in ushering biodiesel into the mainstream.

Cheers,
Dave (AKA greenstork)