California’s second biodiesel plant sets up shop in Gonzales.

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Gillis’ plant will produce B-100, the industry’s designation for product that is 100 percent biofuel. According to Gillis, San Jose-based Coast Oil has already provided EAS, Inc. with a letter indicating they will buy all the B-100 the young company can produce as long as it meets industry standards and is comparable in price to the going market.

In addition to an initial output of a half-million gallons of B-100 and the glycerine byproduct, the plant will also produce a high protein, organic meal prized as feed by dairy farmers that’s created when the seeds are crushed in the oil removal process.

“These byproducts, the meal and the glycerine, they’re not tremendously profitable, but they help,” Gilles says. “And we like the idea of using everything.”

After producing the raw biofuel, EAS, Inc. will sell their 100 percent pure product to “blenders” that mix in petro diesel. Shortly before leaving office, President Bill Clinton signed an executive order requiring all government agencies to convert as many of their vehicles as possible to B-20 fuel, meaning fuel that consists of 20 percent biofuel and 80 percent petro diesel.

According to Gillis, rendering waste like tallow is similar to virgin vegetable oil in the government’s eyes as they’re both considered “first use” raw materials. That translates into tax incentives.

“As the producer, we only get a flat 10 cent tax credit,” Gillis says. “But the blenders get a one dollar tax credit for using first use raw material and a 50 cent tax credit for second use raw material.”

Yellow grease, or oil gathered from restaurants, is considered “second use” material. It takes 7.3 pounds of yellow grease to make one gallon of biodiesel.

“The yellow grease we buy needs to meet certain specifications,” Gilles says. “They need to remove as much of the free fatty acids in the used oil as possible, if not all. Up to 6 or 7 percent is fine, we can get that out. Any more than that and it’s no longer cost effective.”

According to Gilles, the other problem is moisture. In order for the yellow grease to be usable, there needs to be 2 percent or less water in the oil.

 “If you drive a diesel vehicle, you don’t want any water in your fuel,” Gillis says. “It looks like an easy process, but it’s not.”