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I NTRODUCING B IODIESEL IN THE G REAT L AKES R ECREATIONAL M ARINE M ARKET Funding provided by the Great Lakes Regional Biomass Energy Program and the Illinois Soybean Board. Table of Contents Background....................................................... 3 Distribution & Logistics...................................... 4 Market Development......................................... 10 Outreach & Expansion...................................... 14 Conclusions & Recommendations.................... 17 Appendices Appendix I -- Regulatory Analysis Appendix II -- Presentations Appendix III -- Advertising Appendix IV -- Collateral Materials Appendix V -- Public Relations Appendix VI -- Sample Editorial Coverage Appendix VII -- Boater and MarinaContact Database Appendix VIII -- Market Development Activity with Marinas Appendix IX -- NMMA Certification Test Procedures for TCW3™ GREAT LAKES Biodiesel Market Development Program 2 Background Background A comprehensive market assessment process, reinforced with industry input from a market specific task force, indicated that the recreational marine market offers significant market penetration potential for biodiesel. Specifically, market drivers exist for several types of boaters to purchase premium priced biodiesel and/or biodiesel blends due to desirable attributes. Sailboaters, environmentally conscious boaters, and commercial charter companies have all expressed a willingness to “pay more” for a product like biodiesel. Successful programs have been established in the Florida Keys and Chesapeake Bay regions. The marine industry task force established by the National Biodiesel Board recommended that marinas should become a focus for distribution efforts because they are the primary fuel source for non-commercial boaters. With funding from the Illinois Soybean Board and the Great Lakes Regional Biomass Energy Program, the National Biodiesel Board, Chicago Harbors, and Columbus Foods partnered to introduce biodiesel and biodiesel blends to recreational boaters on the Great Lakes. The City of Chicago, through the Chicago Transit Authority and the Chicago Police had previous positive experience with biodiesel in 1995 and therefore were interested in a program to introduce biodiesel to consumers. The Chicago Harbors, which are under the supervision of the Chicago Parks District and management of Westrec Marinas, decided to participate in the program. The overall objective of this project was to establish a distribution system for biodiesel and educate marinas and end users on the attributes of biodiesel to enable successful market penetration of biodiesel in the Great Lakes region. Specifically, the following objectives were to be achieved: ⇑ ⇑ ⇑ ⇑ ⇑ Establish retail fuel distribution for biodiesel in the Great Lakes region Develop and implement a Police boat operating on a biodiesel blend. customer sampling program to introduce biodiesel to targeted boaters Conduct a biodiesel education program for boaters on the attributes of biodiesel and its use and handling requirements. Educate marine groups (boating and industry) on the environmental and operating attributes of biodiesel through presentations and representation at the annual boat show sponsored by NMMA Leverage results of the program with other marina operators and regional organizations GREAT LAKES Biodiesel Market Development Program 3 Distribution and Logistics Previous experience in the Chesapeake Bay and the Florida Keys highlighted the significance of effective distribution, full knowledge of regulatory issues for bulk fuels, and consumer friendly packaging. Prior to addressing these issues however assistance was provided to the Chicago Parks District to resolve questions from biodiesel use the previous year. Distribution & Logistics During the 1997 boating season Westrec Marinas, in conjunction with Columbus Foods, fueled three boat tenders on a biodiesel blend. Approximately one and one-half months into the test the tenders, which are used to shuttle individuals to their boats, experienced a loss of power and clogged filters. After repeated changes of fuel filters, Westrec discontinued use of the fuel. The issues experienced in 1997 were never fully resolved and confidence in the product needed to be addressed. A meeting was held on May 6, 1998 with regard to troubleshooting the performance of the three boat tenders fueled with a biodiesel blend during the 1997 boating season as well as initiation of the Great Lakes Marine Project. During this meeting, a visual inspection of a fuel filter and a small amount of liquid that have been saved from the prior summer’s test was possible. Representatives of Volvo-GMC and the Parks District outlined their issues with the use of biodiesel and the impact that it had operationally the previous season. Two scenarios were discussed with regard to the cause of these problems; high blend level/solvency and microbial growth. After visual inspection of the fuel filter and the small amount of liquid present, additional information was sought with regard to the fueling infrastructure and the engine family that powers the boat tenders. Specifically, information was also sought about the components in the fueling system (composition of the filter element, fuel lines, etc.). The fuel filter and liquid sample were sent to System Lab Services. Based on test results, concentrations of metals in the samples were low; well within range of what we would normally expect to see. Due to the small amount of liquid and inability to perform other analyses a conclusive answer as to the cause of the discoloration was not possible. The metal analyses would indicate that it was not a metals compatibility issue. Microbial growth, sediment from the fueling system, and/or fuel component compatibility are other potential causes of the discoloration. Due to the length of time that elapsed since the fuel filters were pulled from the vehicle, it would not have been conclusive to perform any tests for microbial growth. Biodiesel, unblended, is an excellent solvent and can release sediment and carbon buildup from the fueling system. This could have been a cause of the discoloration. In addition, biodiesel is not compatible with specific types of rubbers and elastomers. This also could have been a cause for the discoloration. It was concluded that the solvency effect of biodiesel most likely caused the filter clogging issue. GREAT LAKES Biodiesel Market Development Program 4 All parties agreed to move forward with the program. A follow-up meeting was held on June 3-4, 1998, in Chicago, to complete plans for the distribution of biodiesel. Biodiesel was to be made available at four of the Chicago Harbors managed by Westrec: Burnham Harbor Jackson Outer Harbor Monroe Harbor Belmont Harbor ………Regulatory Analysis Initially, plans were made to offer biodiesel for sale to boaters in both bulk and smaller containers. Specifically, consideration was to be given to bulk facilities at Jackson Outer Harbor, but not at the initiation of the program. An assessment of the regulatory issues associated with marketing biodiesel in bulk form was conducted prior to initiation of the project. The Illinois State Fire Marshal provides the primary source of regulation. The USEPA may also play a role depending upon the size of above ground tank that is installed at the marina. Since the Chicago Harbors managed by Westrec are within the City limits, the Department of Environment and the Fire Prevention Bureau must approve the site plans. However the City has indicated, that their regulations are not up to date, accordingly, the city will approve plans that conform to the State Fire Marshall’s regulations. Both a permit and site plan will need to be obtained prior to any bulk sales. Additional details are included in the full regulatory report which is located in the appendix of this report. Distribution & Logistics “Definitely reduces odor, no question— especially pronounced in a downwind run.” Fred Kimmel ………Product Packaging Biodiesel has been sold to boaters in small containers at other locations, including five gallon buckets. The five gallon packaging had proven to be very difficult for boaters to handle and sometimes resulted in spills. Therefore, Columbus Foods decided to package biodiesel in 2.5 gallon containers. In order to assist the customers, labels for the containers contained mixing instructions. Also, the label contained other important information such as information on the spontaneous combustion risk associated with rags soaked with biodiesel. Recommendations from the Chesapeake Bay program noted that any distribution plan must include bulk sales. Customers prefer preblended product as well as the lower costs associated with bulk vs containers. The issue is that marina owners cannot afford to switch their existing diesel tanks to only biodiesel at the current time. Marina owners also will not pay the capital expense of an additional tank until profit margins and consumer demand has increased considerably. Columbus Foods was willing to place 300 to 500 gallon skid tanks at Chicago Harbor locations in order to minimize financial risk for the marinas. Prior to initiation of the program however, Westrec decided to not approve bulk sales due to problems experienced with their underground GREAT LAKES Biodiesel Market Development Program 5 diesel tanks during the spring season and the resulting legal considerations. Bulk sales are an item that could be considered in the future depending upon consumer demand. Distribution & Logistics ………Sales Training Consumer education is a vital part of this marketing program. In order to deliver a consistent and accurate message to consumers, the managers of each harbor where biodiesel was marketed went through a training session conducted by the MARCIV. Managers for each of the Harbors were given information about biodiesel including a FAQ page as well as one-on-one instruction. This information will be passed to employees of each of the Harbors. Employees assist boaters during fueling of vessels and had the opportunity to ask boaters if they are familiar with biodiesel. Since marina employees were the primary contact with customers, this training was essential. Listed below is a sample of the FAQs that were addressed with marina managers: FREQUENTLY ASKED QUESTIONS ABOUT BIODIESEL What is biodiesel? Biodiesel is a cleaner burning fuel for diesel engines which is produced from renewable resources such as vegetable oils. It can be used as a pure product or blended at any percentage with petroleum diesel. Biodiesel is simple to use, renewable, domestically produced and readily available. Is biodiesel a new technology? Rudolf Diesel, the inventor of the diesel engine, actually designed the engine to run on peanut oil. However, modern diesel engines operate on derivatives of vegetable oil or recycled cooking oil. Biodiesel sign at Monroe Harbor. How is biodiesel made? Production of biodiesel results from a simple chemical process called transesterification. Basically, esterification occurs when the feedstock oils are blended with an alcohol such as methanol or ethanol, in the presence of a catalyst. Is biodiesel a legal fuel? Biodiesel is legal for commerce in the United States. Biodiesel has been registered with the US Environmental Protection Agency as a fuel and as a fuel additive. Can I use biodiesel in my existing diesel engine? Biodiesel can be blended with petroleum diesel in any combination with little or no modification to the engine or the fuel system and with similar engine performance. Ensure that only fuel meeting the biodiesel specification is used. GREAT LAKES Biodiesel Market Development Program 6 Does biodiesel cost more than other alternative fuels? Distribution & Logistics Independent studies have confirmed that biodiesel blends are cost competitive with other alternative fuels and in many cases represent the least cost option for users. Biodiesel use does NOT require expensive conversions of engines nor modifications to refueling facilities. Will I notice any differences when I use biodiesel? Boaters will notice a change in exhaust odor (to that of fried foods) and a reduction of smoke from the exhaust. Is biodiesel safe? A flash point of over 300½ F makes biodiesel safer to store and handle than petroleum diesel fuel. “[I was] ecstatic with the fuel.” Bob Lurie Does biodiesel reduce the amount of exhaust emissions released into the air? Biodiesel offers significant reduction in exhaust emissions to help protect our environment. ✔ Particulate Matter — breathing particulates has been shown to be a human health hazard. Biodiesel blends significantly cut particulate matter emissions. ✔ Carbon Monoxide - Everyone knows the dangers of this pollutant. Biodiesel blends greatly reduce the amount of carbon monoxide diesel engines produce. ✔ Ozone Forming Potential — research documents the fact that the ozone forming potential of the hydrocarbon emissions of biodiesel is nearly 50% less than that of petroleum fuel. ✔ Sulfur Dioxide — This pollutant causes acid rain. Biodiesel does not contain sulfur therefore reducing sulfur dioxide exhaust from diesel engines. Is biodiesel better for the environment? Tests sponsored by the United States Department of Agriculture confirm that biodiesel is less toxic than petroleum fuel and biodegrades as fast as dextrose (a test sugar). Where can I find more information on biodiesel? Contact the National Biodiesel Board at 800.841.5849 or visit the biodiesel web site at <www.biodiesel.org>. Is biodiesel exhaust safer for people to breathe? Polycyclic aromatic hydrocarbons (PAH) and nitrited PAH (nPAH) compounds have been identified as potential cancer causing compounds. PAH and nPAH compounds were reduced by 75% to 85% in engine tests completed at an independent testing laboratory. GREAT LAKES Biodiesel Market Development Program 7 How does biodiesel compare to regular petroleum diesel? Distribution & Logistics From a practical standpoint, biodiesel’s performance in diesel vehicles is nearly identical to petroleum diesel. Is the cetane of biodiesel higher or lower than that of petroleum diesel? The cetane number of biodiesel is higher than that of petroleum diesel fuel. Are there any special considerations for the use of biodiesel? Boaters need to be aware of the special attributes of biodiesel: Infrastructure In general, the standard storage and handling procedures used for petroleum diesel can be used for biodiesel. The fuel should be stored in a clean, dry, dark environment. Temperature extremes should be avoided. Acceptable storage tank materials include stainless steel, fluorinated polyethylene, and fluorinated polypropylene. Biodiesel has a solvent effect which may release deposits accumulated on tank walls and pipes from previous fuel storage. The release of deposits may clog filters initially and precautions should be taken . Materials Compatibility Biodiesel over time will soften and degrade certain types of elastomers (rubber replacements) and natural rubber compounds. Precautions are needed when using high percent blends to ensure that the existing fueling system components (primarily fuel hoses and fuel pump seals), do not contain elastomer compounds incompatible with biodiesel. Manufacturers recommend that natural or butyl rubbers not be allowed to come in contact with neat biodiesel. Biodiesel will lead to degradation of these materials. If a vehicle’s fuel system does contain these materials, replacement with biodiesel compatible elastomers ® such as Viton B is recommended. The recent switch to low sulfur diesel fuel has caused most original equipment manufacturers (OEMs) to switch to components suitable for use with biodiesel, but users should contact their OEM for specific information. Rubber is not the only material affected by biodiesel’s solvent properties. If left on a painted surface too long, biodiesel can dissolve certain types of paints. Therefore, it is recommended to wipe any biodiesel or biodiesel blend spills from painted surfaces thoroughly so that the boat’s gelcoat or teak are not affected. Contact the National Biodiesel Board to check about specific materials compatibility issues. Spontaneous Combustion Risk Biodiesel soaked rags should not be stored together due to the risk that the rags will biodegrade, give off heat, and potentially create an environment favorable to spontaneous combustion. GREAT LAKES Biodiesel Market Development Program 8 Cold Flow Properties Distribution & Logistics As with any diesel fuel, cold flow properties are important. Users of a 20% blend of biodiesel will experience an increase of the cold flow properties (cold filter plugging point, cloud point, pour point) of approximately 1 to 3½ Celsius. Thus far, no precautions beyond those already employed for petroleum diesel have been needed for fueling with 20% blends. However neat (100%) biodiesel will result in faster gelling than petrodiesel in cold weather operations. Solutions for winter operability are much the same as that with low-sulfur #2 diesel (i.e., blending with No. 1 diesel, utilization of fuel heaters and storage of the vehicle in or near a building). Biodiesel appears to be largely unaffected by conventional pour point depressants. Operating Performance One of the major advantages of biodiesel is the fact that it can be used in existing engines and fuel injection equipment without negative impacts to operating performance. Biodiesel has a higher cetane number than conventional diesel fuel and its use in previous in-field demonstrations showed similar fuel consumption, horsepower, torque, and haulage rates as conventional diesel fuel. Engine Warranties Manufacturer’s warranties generally cover defects in material and workmanship of the engine and its components. Those warranties do not cover engine problems related to any type of fuel issues, including petroleum based diesel fuel. Manufacturers usually list the types of fuels that are recommended or approved for use in their engines. For biodiesel, the fuel is defined by the biodiesel specification. Care must be taken to ensure that only high quality fuel is used and that the proper precautions are observed (materials compatibility, cold flow, etc.) to ensure trouble free use of biodiesel. GREAT LAKES Biodiesel Market Development Program 9 Market Development Market Development Boaters have expressed several reasons for wanting to burn biodiesel in their diesel powered vessels because it introduces many benefits to the boating experience. Not only does biodiesel increase biodegradability, increase safety, and decrease emissions and toxicity, biodiesel also allows for more pleasurable boating without costly engine modifications. Many boaters have indicated that lack of smoke, safety, and the dramatic change in exhaust odor are significant reasons why boaters will consider switching to biodiesel or biodiesel blends. Marketing efforts in the marine market were focused on specific boating groups where environmental benefits or competitive advantage are the basis of buying decisions. The hottest prospects for niche market sales today are: 1) commercial boat operators such as charter fishing boats, dive boats and tour boats who would gain a competitive advantage because riding in their boats won’t make their customers sick, 2) sailboat owners because each individual is a low volume user, and are affected by the smell and smoke of diesel, and 3) environmentally conscious boaters who hate the negative impacts of diesel. Buying decisions will be made by highly motivated groups where price is secondary, or by those seeking competitive advantage where costs will be balanced by increased revenue. Success with this market depends upon recreational boaters understanding the environmental, operating, and economic implications of biodiesel. Market development activities centered on raising the general awareness of boaters about biodiesel through the use of ads, collateral pieces available at the participating marinas, a Fuel Trial Weekend in June, and public relations events and press releases. ……….Advertising and Collateral Pieces Print ads were used to increase awareness among boaters. In order to reach the largest number of boaters, marina managers were surveyed to select the magazines that were highly regarded. A variation of the ad used in the previous Chesapeake Bay program was utilized for this program. Ads were placed in two regional publications; Lakeland Boating and Great Lakes Boating. Ads were placed three times in one publication and four times in the other. Ads were changed throughout the season to carry different messages to boaters. For exGREAT LAKES Biodiesel Market Development Program 10 ample, initial ads tried to capture the attention of boaters by a catchy title relating to the smell of the fuel. Following ads highlighted the availability of biodiesel for the 1998 boating season. The last two ads which were placed in the Spring of 1999 called attention to boaters that it was time for them to try biodiesel. In addition to print advertising, several collateral pieces were utilized in the program. Market Development Previous experience gained from interaction with recreational boaters in the Florida Keys, Chesapeake Bay, and other major boating regions demonstrated the need for two types of outreach collateral; a non-technical overview of biodiesel and a more detailed summary of biodiesel’s attributes and special considerations for use. Although many boaters are only interested in basic information about biodiesel, there is a definite population of boaters that will not use the product without significant information about the composition of the product, its attributes, and any special handling characteristics. Leveraging other resources, the tri-fold brochure was developed to be viewed by the average consumer who only desire the highlights of biodiesel. Several messages are stressed in this brochure: Impacts on the environment, benefits to the user, and answers to frequently asked questions. Development of the marine specific situation and outlook report was handled in a similar manner as the tri-fold brochure. The expanded, technical report covered the attributes of biodiesel, availability, considerations for use, and market development activities. The document was designed so that the ‘considerations for use’ and ‘retail locations’ sections could be pulled from the report as a one page reference. Discussion of biodiesel’s attributes was technical in nature, but written in an easy to understand manner. In addition, banners were developed and placed at the participating marinas for the summer and the Illinois Soybean Board developed posters mounted on heavy board which would serve to hold the tri-fold brochures. These items were also located at participating marinas. Biodiesel information was made available to boaters. GREAT LAKES Biodiesel Market Development Program 11 Market Development ……….Fuel Trials Weekend and Sales The Fuel Trials Weekend was conducted on June 27-28, 1998. The overall intent of this event was to get free samples of biodiesel into the hands of recreational boaters to prove the positive attributes of biodiesel. S&S Public Relations, a public relations firm retained by Columbus Foods, assisted with publicizing this event. A press release was sent to local media sources announcing the weekend event. Two radio interviews on the weekend event were conducted by MARC-IV. In addition, material was developed specifically for the event. Columbus Foods prepared 4 x 8 banners for each site and prepared three fold brochures on their company. The National Biodiesel Board developed (4) four 2 x 4 banners announcing the availability of biodiesel at each of the Harbors. In addition, brochure displays (developed by the Illinois Soybean Checkoff Board), brochures, FAQ’s, and table top displays were utilized at two of the sites. An initial shipment of twentyfive cases of biodiesel (100 gallons) were delivered to each of the four Harbors. The two-day event went quite well at two of the Harbors (Burnham and Monroe). There was relatively little boating Fuel trial weekend at Burnham Harbor. activity at Belmont and only slightly more at Jackson Outer. However, according to Columbus Foods a total of 100 cases of biodiesel (500 gallons) were distributed to boaters during the weekend event. In exchange for a free 2.5 gallon sample of biodiesel, boaters were asked to supply their name and address if they were willing. Two television stations carried stories on the event including one five minute segment and an introduction to the weather on Saturday evening. The biodiesel containers distributed on the 27th and 28th only had a front label. Containers were to have both a front and back label with the back label including mixing instructions and other information on biodiesel use. Because the back label was missing, Columbus pulled remaining samples after the event until the back label with mixing instructions was complete. Biodiesel was back on the shelf and available for sale in July. Sales throughout the summer were virtually nonexistent. Two factors had a large impact on commercial sales. First, biodiesel did not become offiGREAT LAKES Biodiesel Market Development Program 12 cially available for sale until late in the boating season due to labeling issues. August and September are usually some of the slowest months for fuel sales. Second, a significant amount of biodiesel was given to boaters during the fuel trial weekend. Therefore, many sailboat owners utilized the allotment given during that weekend and did not need to purchase any fuel for the rest of the boating season. Market Development ……….Public Relations Other events/items that were utilized to assist with marketing include point of sale materials, the Westrec mid-summer newsletter to slipholders, an Illinois Soybean Board sponsored press event, and the Illinois Soybean Association Westrec employee speaks about using Legislative Day on August 11-12. biodiesel. For the August event, staffers were picked up at Burnham Harbor on the evening of August 11th for a short biodiesel powered boat ride of the Burnham and Monroe Harbors. Biodiesel news releases and featured articles appeared in the Chicago Tribune as well as the Illinois Agrinews (copies attached). The Illinois Soybean Checkoff Board also coordinated a press event which was held at the Burnham Yacht Club and included the Chairman of the Illinois Soybean Checkoff Board, Representative John Shimkus, the Illinois Secretary of State, the President of the Illinois Soybean Association, and representation from the Great Lakes Regional Biomass Energy Program. The event was picked up by US Farm Report, a nationally syndiBiodiesel powered boat tender at Burnham Harbor. cated program hosted by Orion Samuelson and Max Armstrong. Also, Congressman John Shimkus appeared live on Chicago’s business station, WCIU. The Illinois Soybean Checkoff Board has made a video tape of these programs available. GREAT LAKES Biodiesel Market Development Program 13 Outreach and Expansion Outreach & Expansion An important aspect of the biodiesel marine program is to leverage success to make biodiesel more readily accessible for consumers. In 1998, the biodiesel introduction was limited to the Chicago Harbor system. Several activities were undertaken to raise awareness among boaters and marinas outside of the Chicago area. Specifically, a large effort was initiated with marinas north and southeast of Chicago. In addition, a phone survey was initiated, several speaking engagements were conducted and representatives of Columbus Foods attended the IMTECH boat show in Chicago. ……….Marina Market Development Efforts were initiated to expand the distribution to other marinas outside of the Chicago area. A listing of all Lake Michigan marinas was secured and marinas immediately surrounding the Chicago area were phoned to determine the appropriate contact (manager or purchasing agent). These names and addresses were entered into a database that was utilized for a mailer. A letter and two page color informational piece were developed and packaged with a biodiesel fuel sample and mailed to over 75 marinas in March 1999. Soon after the mailer was sent, follow-up phone calls were initiated. Managers were asked if they have additional questions or would like a ‘face to face’ meeting to discuss the opportunities associated with selling biodiesel. The marinas that expressed interest in carrying biodiesel in the upcoming boating Joe Loveshe, Columbus Foods, speaks season then received an informational with a customer. brochure regarding biodiesel use in the marine market. Several meetings were scheduled for April 21-22, 1999. These meetings were used to secure additional retail outlets for biodiesel during the ’99 boating season. Columbus Foods, a biodiesel producer/ marketer, joined these meetings and all marinas that expressed interest in carrying biodiesel were directed to Joe Loveshe at Columbus Foods. The target market was expanded to twenty-two additional marinas located in Grand Haven, Muskegon and White Lake, Michigan. Again, all marinas that expressed interest in carrying biodiesel were directed to Joe Loveshe at Columbus Foods GREAT LAKES Biodiesel Market Development Program 14 ……….Speaking Engagements and Presentations Outreach & Expansion Biodiesel was the featured topic at the August Commodore’s Meeting. The Commodore’s meeting, held at the Columbia Yacht Club, was attended by all nine of the Chicago Yacht Clubs and all of the Chicago Harbors. Also in attendance were representatives of the Chicago Police Marine Division and the Coast Guard. After a presentation on this year’s marine introduction at four of the Chicago Harbors and details on the attributes of biodiesel, a question and answer session led to healthy discussions of biodiesel’s applications. At the conclusion of the meeting, one of the Yacht Clubs expressed interest in handling biodiesel. Arrangements were made for Columbus Foods to deliver product to the Burnham Yacht Club for the remainder of this boating season. As additional leveraging activities, Columbus Foods also conducted two more Fuel Trials Weekends similar to that held the last weekend in June in areas outside of the Chicago Harbor system. In addition to outreach activities, an initial meeting was held with the National Marine Manufacturers Association (NMMA) with respect to their certification program for TC-W3™. The advanced design of two stroke gasoline outboard motors coupled with increased fuel/oil ratios increased lubricant requirements. The NMMA developed a procedure for the certification of premium quality lubricants. In order to qualify for the TCW3™ certification the marketer must enter into and comply with a licensing agreement with NMMA (including payment of an annual fee) and conduct a series of defined tests on their product. The test procedures provide a basis on which a candidate lubricant can qualify for certification. Presently, NMMA does not have any plans of introducing a certification program for fuels, however is considering a program for biodegradable lubricants. GREAT LAKES Biodiesel Market Development Program 15 ……….Chicago Boater Survey Outreach & Expansion A random sample of the boaters that received biodiesel samples in June during the Fuel Trial Weekend were selected and contacted by phone with regard to their experience with biodiesel. With one exception, all experiences were positive. Most of the boaters utilized less than a 20% vol. blend as they merely topped off their fuel tank with the 2.5 gallon sample. Therefore, several boaters did not notice a dramatic reduction of smoke or change in odor. This result can be expected if a lower blend level such as 10% if burned. Almost 90% of the boaters thought that the boat’s engine performance when using biodiesel was as good as or better than when using petrodiesel. Many of those interviewed expressed a willingness to purchase biodiesel during the next boating season. However one individual experienced microbial growth problems when he utilized biodiesel and therefore will definitely not be a repeat customer (he was the only individual surveyed that experienced this or any other issue). A couple of boaters do not intend to purchase the fuel in ‘99 due to the price of biodiesel, however most merely asked where it will be available and indicated that they intend to purchase biodiesel next season. As follow-up to the phone survey, letters were sent to the boaters that participated in the 1998 Fuel Trial Weekend informing them of the marinas that were expected to carry biodiesel in the 1999 boating season. ……….IMTECH Boat Show The 1998 IMTEC Boat Show was held from October 1-3, 1998 at McCormick Place in Chicago. The IMTEC show is organized by the National Marine Manufacturers Association (NMMA) and attracts more than 43,000 people each year, including marine manufacturers, dealers, reps, marine services personnel and marina owners and operators. The National Biodiesel Board made a floor display, brochures, and other information available for the trade show. Assistance to man the display was provided by representatives of Columbus Foods. The three day show resulted in significant interest in biodiesel and a number of attendees were interested in its local availability. GREAT LAKES Biodiesel Market Development Program 16 Conclusion and Recommendations Based on results of the random telephone survey of boaters that had used biodiesel during the 1998 boating season, biodiesel was accepted by recreational sailboaters as an acceptable substitute or blending component to conventional diesel fuel. Only one boater of all those interviewed had experienced any issue with the fuel. However, commercial sales from the boating season did not support this statement since Columbus Foods did not report any sales levels of significance. Conclusions & Recommendations As reported previously, two factors had a large impact on commercial sales. First, biodiesel did not become officially available for sale until late in the boating season due to labeling issues. August and September are usually some of the slowest months for fuel sales. Second, a significant amount of biodiesel was given to boaters during the fuel trial weekend. Therefore, many sailboat owners utilized the allotment given during that weekend and did not need to purchase any fuel for the rest of the boating season. Based on the fact that Westrec and several other marinas outside of the Chicago area offered biodiesel in 1999, marina operators understand the value of an environmental fuel and will sell the product if demanded by consumers. Sailboat operators have accepted the product, however would prefer to use preblended product that is available in bulk form. Other diesel marine users were not as quick to purchase biodiesel. Margins for marketers such as Columbus Foods were very “thin” and servicing the marine market only for sailboaters became an expensive decision. Therefore increased demand for biodiesel by larger fuel users in the marine market and other markets such as state and federal fleets will be required before fuel marketers can justify bulk fuel sales into the marine market. Expanded use and production of biodiesel offers both environmental and economic benefits to the Great Lakes region. Production of biodiesel creates the opportunity to utilize resources that are grown in the Great Lakes region that will help to create jobs and increase economic activity. Use of biodiesel in marine applications will help to protect the Great Lakes region because biodiesel offers positive environmental traits. Market development activities should be intensified in the area of education and outreach to potential users of biodiesel, specifically for large users such as fleets impacted by the Energy Policy Act. At the same time, marketers should concentrate on incorporating biodiesel into existing or new programs that help to protect the Great Lakes and investigate the possibility of preferential procurement programs. GREAT LAKES Biodiesel Market Development Program 17 Appendices Regulatory Analysis Presentations Advertising Collateral Materials Public Relations Sample Editorial Coverage Boater and Marina Contact Database Market Development Activity with Marinas NMMA Certification Test Procedures for TC-W3™