Biodiesel industry sets vision for growth01/23/2020 | Biodiesel, Economics
By Bethany Baratta, ISA senior writer
Within the next 10 years, the biodiesel industry plans to double production to meet the anticipated demand. The 6-billion-gallon target is one step toward an even bigger goal of 15 billion gallons of production by 2050.
National Biodiesel Board (NBB) CEO Donnell Rehagen presented the strategy this week at the industry’s national conference and expo in Tampa.
“Biodiesel can no longer be viewed as an afterthought, a diesel blend stock, arbitrage opportunity; biodiesel must be understood as a premium product,” Rehagen said. “It must be produced, bought and sold that way.”
Considering that more than half of the biodiesel produced in the United States is made using soybean oil, these lofty goals represent huge opportunities for soybean farmers.
“Soybeans are going to be the primary beneficiary because there is no other feedstock grown in the United States that has the versatility and sizable oil volumes like soybeans,” said Grant Kimberley, director of market development for the Iowa Soybean Association (ISA) and executive director of the Iowa Biodiesel Board.
Recent studies show that biodiesel adds about $1 per bushel to the price of soybeans.
“Anytime that we can see increased demand for our soybeans is a good thing,” said Dave Walton, treasurer for the ISA board of directors and a member of the board of directors for NBB.
Increased demand will be fueled by ratcheted efforts to include more biodiesel, renewable diesel, and renewable jet fuel in on road, off road, and home heating applications, Rehagen said.
As more states look to adopt low-carbon policies, biodiesel is a natural fit, said Tom Vincent, ISA District 5 Director from Perry.
“Biodiesel is a very low carbon emission fuel source, ahead of electricity and natural gas, so it has a tremendous advantage right out the starting gate,” Vincent said.
Goals within reach
The 6 billion-gallon production goal by 2030 is absolutely achievable, Walton said.
“We’ve set that path now with more markets requiring or asking for a low-carbon fuel, so it’s a very easy fit for us in those markets,” he said.
But the push to the 15-billion-gallon goal by 2050 won’t be a cakewalk, Rehagen said.
“It will take some rebranding of sorts to help consumers and policymakers understand how biodiesel and renewable diesel are not just like diesel, but rather, way better,” he said.
The NBB rolled out its new biodiesel tagline: Biodiesel: Better. Cleaner. Now. This better reflects the attributes of the homegrown fuel: it’s increased performance over diesel, it’s low carbon emissions, and the immediate availability of the fuel, Rehagen said.
Rehagen expects the new tagline and renewed efforts to promote usage of the product to increase demand.
Biodiesel on the farm
At the local level, Vincent said higher rates of biodiesel usage at the farmer level will also help drive demand. Sixty percent of respondents to an ISA producer survey said they use biodiesel on their farm. This was up from 43% in 2012.
“We have as much to benefit from it as anybody, we need to be using it ourselves,” Vincent said.
Kimberley, Walton and Vincent all use blends of biodiesel on their farms. They say existing infrastructure in the state isn’t conducive for providing 20% biodiesel (B20) blends year-round. However, they are hopeful that the Higher Blends Infrastructure Incentive Program recently announced by the U.S. Department of Agriculture expands the availability of biodiesel by incentivizing the expansion of sales of renewable fuels.
“It means there’s money there for upgrades to infrastructure for biodiesel and biofuels,” Walton said. “That announcement was a real shot in the arm to the industry.”
The increased demand for soybean oil to create biodiesel also means increased supplies of soybean meal. While livestock farmers are the greatest customer for Iowa soybean growers, Kimberley said it’s vital to develop markets for all parts of the soybean both domestically and abroad.
The Iowa Biodiesel Board and the Iowa Soybean Association will continue to work with the National Biodiesel Board, the U.S. Soybean Export Council, the U.S. Meat Export Federation and the USA Poultry and Egg Export Council to increase markets and opportunities, he said.
“We have to continue to grow our own industry and our partner industries in the United States, and work to grow opportunities overseas,” Kimberley said. “We have to be involved in and engaged where those opportunities are around the world, and we’ll continue to do that through partnerships.”
Contact Bethany Baratta at firstname.lastname@example.org.
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