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Chesapeake Green Fuels, a burgeoning biodiesel company in Adamstown, had to scrap its plan to open a production plant in Baltimore that would churn out 10 million gallons annually and recently announced a new location — Delaware.

The company is one of several in Maryland's biofuel industry that are unlikely to contribute a significant number of jobs, despite Gov. O'Malley's goal to add 100,000 "green collar" jobs by 2015.

Chesapeake Green Fuels, which makes biodiesel from recycled restaurant grease, struggled to secure financing for a Baltimore plant that would have had about 25 employees hired through Maryland's Enterprise Zone program.

Instead, the four Butz brothers who started the company purchased a defunct biodiesel refinery in Delaware that had closed after one year and are continuing to produce on a small scale on their Windridge Farm near Buckeystown.

After retrofitting the building in Delaware in the next few months, the company expects to produce up to 5 million gallons annually, less than half of the planned production in Baltimore.

Financing is still tight for the Delaware operation, but Chesapeake Green Fuels is on track to open the plant by the end of the summer, then hire roughly 20 workers — chemists, lab technicians and managers — in "good-paying jobs," said co-owner Robert Butz.

"Beyond job creation, the goal is we're going to give people a very viable choice that is better for the environment," Butz said. "And they're going to pay no more for our product."

New Baltimore biofuel plant delivers to Keymar operation

Catoctin Mountain Growers in Keymar, which grows plants for large retailers such as Wal-Mart, plus a Boston hospital, is adopting more biodiesel use in its operation, including fuel from a new plant in Curtis Bay in Baltimore.

New Generation Biofuels delivered its first batch of milky, emulsified biofuel this month to Delta Chemical Corp. and plans to add regular deliveries to Catoctin Mountain in the near future.

In sharp contrast to the black tea-like liquid that biodiesel users are familiar with, New Generation's fuel is one of several products consumers have been sampling as petroleum and diesel substitutes. New Generation, of Lake Mary, Fla., opened the plant this month and plans to produce about 5 million gallons annually.

So far the company has needed only a few contract workers for production, said marketing manager Phil Wallis, but may add two permanent staff in the next year.

First biodiesel plant is struggling

The state's first biodiesel plant, Maryland Biodiesel, opened in Berlin in 2006 and is still producing feedstock-derived fuel. Its fortunes initially boomed, as feedstock was fairly inexpensive and conventional fuel prices soared. But now that feedstock costs have risen and gasoline and diesel prices have fallen, the company is selling its fuel at a loss.

"Feedstock prices have skyrocketed. We just can't compete," said Ginger Warren, who founded Maryland Biodiesel with her husband, James. "Everybody wants to do the right thing, but when it comes down to it, it's the prices." The plant once produced about 400,000 gallons annually, but now churns out only half that.

To break even after paying $1.70 for poultry fat and tacking on taxes and other costs, Maryland Biodiesel would have to sell pure biodiesel for at least $3.85 per gallon. For now, the fuel is sold at low, competitive prices to Worcester County, Ocean City hotels and agencies such as the Maryland State Highway Administration. The Warrens' other business, Cropper Oil & Gas, has kept them afloat.

"We just wanted to have an alternative fuel, something in Maryland that is made here," Warren said. "That's why we went on a small scale — we didn't want to go over our heads. … We just don't know what's going to happen in the next year."

Maryland Biodiesel's staff of four would be absorbed into Cropper Oil & Gas if the biodiesel venture continues to struggle, and Warren expects no new hires for the alternative fuel business anytime soon.

The plant is one of only a few biodiesel facilities in the state. Others include Greenlight Biofuels, which opened in 2007 near Salisbury, and Eagle Creek Biofuel Services, which opened eight months ago in Baltimore.

E-mail Rebecca McClay at rmcclay@gazette.net.

-Biofuel: any fuel made from a renewable source that is nontoxic, biodegradable and significantly reduces emissions.

-Biodiesel: biofuels made from fatty-based substances such as soybean and other vegetable oils or animal fats. A conversion process adds oxygen and removes glycerin from the oil.

-Biodiesel blend: pure biodiesel mixed with petrodiesel. Blends are labeled according to the percentage of pure biodiesel. For example, B40 would have 40 percent biodiesel and 60 percent petrodiesel.

-Ethanol: made from grain or corn, the same as found in liquor. It must be fermented, distilled and dehydrated.

-U.S. biodiesel production increased from 75 million gallons in 2005 to nearly 700 million gallons in 2008.

Source: National Biodiesel Board