Biodiesel: Cummins

Engine maker Cummins recently announced it will approve the use of B20 biodiesel in its engines. Previously, the company had limited use to B5. However, Cummins made the move following the results of recent ATSM testing and growing confidence in the quality and stability of B20 supplies.

The important point here isn't that this is going to result in a significant short term impact to Cummins market share. Rather, it's a potential huge shot in the arm to biodiesel suppliers because a major hurdle to B20 adoption by fleet managers (the major user of diesel equipped vehicles) has been removed.

By authorizing the use of B20, Cummins will now offer comprehensive warranty support to engines using the fuel. Without this support, fleet managers charged with protecting their vehicle assets won't seriously consider biodiesel use.

As other manufacturers adopt Cummins' stance on B20, more fleets will adopt biodiesel, making suppliers a more attractive investment opportunity.