Interstate 65 is being touted as America's first "biofuels corridor," with B20 biodiesel-blend diesel and E85 ethanol-blend gasoline all along the highway.

In other words, biodiesel is available the length of the interstate from Gary, Ind., to Mobile, Ala.

The biofuels corridor is the result of a $1.3 million federal project that involved Indiana, Kentucky, Tennessee and Alabama, the four states through which I-65 travels.

As recently as three years ago, there were no B20 biodiesel or E85 ethanol fueling stations along I-65. With the completion of the project, there are 31 refueling stations accessible from the interstate, with more planned.

Biodiesel in bailout

As part of the financial rescue bill passed by Congress in October, there are measures that extend the tax incentive for biodiesel and close the so-called "splash and dash" loophole.

According to the National Biodiesel Board, the Emergency Economic Stabilization Act specifically:

Extends the biodiesel tax incentive through Dec. 31, 2009.

Provides that all biodiesel, regardless of feedstock used to produce the fuel, qualifies for the $1 per gallon biodiesel incentive. Currently, biodiesel produced from yellow grease is eligible for a 50 cents per gallon tax incentive.

Closes the so-called "splash-and-dash" loophole.

Splash-and-dash is where foreign finished fuel is sent to the U.S., splash-blended to claim the tax incentive, and then shipped to a third country for final use.

The legislation provides that effective May 15, 2008, fuel produced outside the U.S. for use outside the U.S. does not qualify for the biodiesel tax incentive.

U.S. developing biofuels

The U.S. Energy and Agriculture departments have announced a plan to work together on development of biofuels.

The National Biofuels Action Plan is an interagency effort to accelerate development of a sustainable biofuels industry in the United States. The plan includes funding for sustainability, feedstock production, feedstock logistics, conversion science and technology, distribution infrastructure, blending, environment, health and safety.

Since 2006 the Energy Department has dedicated more than $1 billion to cellulosic biofuel, and the Department of Agriculture has invested almost $600 million.