Chattanooga has started to use biodiesel this week in its fleet of 400 vehicles, according to news reports. Biodiesel, typically made from vegetable oils or animal fats, often is mixed with petroleum diesel to produce different blends. Brian Kiesche, the city's fleet manager, said the city is starting with a blend of 5 percent biodiesel and 95 percent petroleum diesel. It plans to use a 20 percent biodiesel blend soon, he said in a report in the Chattanooga Times Free Press. Knoxville's transit system started using biodiesel in its fleet in the summer of 2004, said Mark Hairr, its executive director. The Knoxville system is paying 23 cents per gallon more for a 20 percent blend of biodiesel than for petroleum diesel, he said. But Hairr said the system has a federal grant to make up for the higher cost of biodiesel, according to the Times Free Press Report. The Denver Public School district -- with the largest school bus fleet in Colorado -- will use biodiesel fuel made by a Fort Collins company in 50 of its 450 school buses, according to a press release from Blue Sun, the biodiesel supplier. The City and County of Denver had been using B20 biodiesel fuel in a pilot program that ended in December 2004. The Denver school district is using the fuel as part of the federal Environmental Protection Agency's "Clean School Bus" initiative to reduce diesel pollution and improve air quality. Diesel prices have risen 38 percent in the last year. Federal subsidies for alternative fuels that took effect in January 2005 are expected make biodiesel prices more competitive. Several school districts in the Denver area are now using "B20" biodiesel fuel in buses. B20 is a mixture of 20 percent biodiesel blended with 80 percent diesel fuel. B20 can reduce hydrocarbon emissions by 20 percent, as well as lowering carbon monoxide and particulates. In addition to school districts, municipal and commercial fleets are converting to Blue Sun's biodiesel, including city and county fleets in Denver, Boulder, Durango and Fort Collins. A group planning to build a biodiesel plant in Wall Lake, Iowa will seek $20 million from investors starting next week. Western Iowa Energy LLC says the plant will produce 30 million gallons of biodiesel a year. The plant is seen as a boost to Iowa's rural economy. The Missouri State Senate voted to give grants to farmers who can turn soybeans into the cleaner-burning diesel fuel. The South Dakota House of Representatives has revived a plan to cut the state tax on biodiesel fuel made from soybeans. At the 2005 Geneva Motor Show this week, DaimlerChrysler is emphasizing its strategic commitment to the development and introduction of Biomass-to-Liquid (BTL) synthetic diesel fuel—which it calls SunDiesel.