updated 8/7/2006 10:52:57 AM ET 2006-08-07T14:52:57

Buyers of Jeep's newest full-sized sport utility vehicle will hit the road with a tankful of a diesel fuel blend made from soybean oil, fast-food grease or vegetable oil.

When Jeep maker DaimlerChrysler delivers the diesel-powered Jeep Grand Cherokee CRD to dealers in the first quarter of 2007, the SUVs will be filled with B5, a blend containing 5 percent biodiesel.

Supporters of biodiesel hope the move will signal increased interest in the fuel, which has lagged behind the rapidly growing ethanol industry.

"It's very exciting that an internationally respected company like DaimlerChrysler is taking a leadership role in protecting the environment and reducing dependence on petroleum by factory-filling the Cherokee with biodiesel, a domestic, renewable, cleaner burning fuel grown here in Iowa," said Grant Kimberley, a spokesman for the Iowa Soybean Association.

By filling up with biodiesel, Kimberley said auto and engine manufacturers are embracing the use of the fuel.

Iowa has six biodiesel manufacturers, six more under construction, and 10 in the feasibility and planning stages. Within the next year and a half, Iowa's biodiesel production capacity will be more than 250 million gallons per year, Kimberley said.

Production in 30 states
Nationwide, there are 65 commercial biodiesel production plants in 30 states, according to the National Biodiesel Board. The majority use soybean oil, but many use multiple oil sources, including other vegetable oils from corn and canola or animal fats such as lard or poultry fat. Five plants used recycled restaurant cooking oil and one plant in Texas used beef tallow.

The U.S. Department of Energy says biodiesel is the nation's fastest growing alternative fuel. Production tripled in 2005 to 75 million gallons, from 25 million gallons in 2004. The industry is on track to produce 150 million gallons this year, the NBB said.

The group said about 850 retail fueling stations sell biodiesel.

The United States was the world leader in ethanol production in 2005, with 4.26 billion gallons, according to the Renewable Fuels Association, a trade group.

Major engine and auto manufacturers support the 5 percent biodiesel blend as long as it meets certain quality specifications.

Certification and wide acceptance by engine and car manufacturers of B20, a blend of 20 percent biodiesel and petroleum-based diesel, is in the works.

Libertys get B5, B20 next?
DaimlerChrysler spokesman Max Gates said about 15,000 Jeep Liberty vehicles factory-filled with B5 have been sold in the past 18 months. It was the company's first test market of the idea.

"The response has been positive. We think it's a good start," he said.

The company has approved a test program to begin this fall in which its diesel-equipped Dodge Ram pickups sold to fleet customers — commercial, government and military buyers — will run on B20.

"We want to start getting the data so that we can move toward being able to approve use of B20 in all of our diesel vehicles," Gates said.

The B20 mixture is the most commonly used biodiesel blend, used primarily because of the government credits permitted for fleets, said Amber Pearson, a spokeswoman with the National Biodiesel Board.

Automakers support B5 in their warranties, but make no assurances for higher percentage blends.

The 2007 Grand Cherokee is the Chrysler Group's first diesel-powered, full-sized sport utility vehicle to be offered in the United States. It comes equipped with a 3.0-liter common rail turbo diesel engine built by Mercedes-Benz.

The engine uses new technology that improves performance through an electronically controlled high pressure injection of diesel fuel into the combustion chamber. The improved combustion boosts power output, reduces carbon dioxide emissions by up to 20 percent and improves the engine's fuel economy by an average of 30 percent.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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