Biodiesel is an inexpensive, environmentally friendly source of energy. These benefits have sparked the public's interest in using this to fuel their cars. This increased interest has motivated many new companies and hobbyists to become producers and sellers of this new fuel.

As with any other product, producers and sellers must meet certain regulations and, in addition, are encouraged to follow suggested guidelines.

Regulations concerning the production and selling of biodiesel greatly varies from State to State. While many states do not possess explicit regulations or laws governing the production and sale of biodiesel, other states do have such regulations or laws as well as legal definitions of what qualifies.

When a state possesses an explicit legal definition of what constitutes a biodiesel fuel it usually includes one or more of the specifications, such as the D6751 specification, provided by the American Society for Testing and Materials (ASTM).

The State of Michigan is perhaps one of the most stringent States in that it prohibits refiners, distributors and retailers from transferring or dispensing biodiesel containing visible "undissolved water, sediments and other suspended matter". Furthermore, Michigan retailers cannot sell from storage tanks that contain 2 inches or more of water, or a mixture of water and alcohol, at the bottom of the tank.

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