Are they selling their production?  If so, then they are obviously not over-priced for the market.  

My understanding is that it is in the plant's interest to get the blenders license and sell blended product so that someone else in the chain is not the one capitalizing on the credits.   That is how ours is going to do it.  

Without the credits, the bio would be selling for a dollar per gallon more then it currently is.  It's not going to come down until there is enough supply to satisfy the demand for it as an additive. Once that happens, it will assume a role as a fuel and be priced accordingly.  The great thing about the biodiesel is that there is extreme demand elasticity then the price gets lower.  With it priced $1 over diesel the demand is set by the need for lubricity additives, but if the price goes down, depmand goes up, until at the point where the price becomes lower then diesel the demand will be effectively infinate.