Course: BFM 202 Biodiesel Production

Review Lecture

Biodiesel in the United States

Unit 12 Biodiesel in the United States

Biodiesel in the United States

Biodiesel is the first Advanced Biofuel in America. Biodiesel is good for the environment, good for the economy, good for job creation, and good for reducing our dependence on foreign oil. It can be made from renewable resources such as vegetable oils from crops, recycled cooking oil and animal fats. When it meets the standards of ASTM D6751, it is a good drop-in fuel for transportation and heating oil and helps meet the needs of a growing population for transportation and energy needs.

This chapter will look at the history of biodiesel in the United States, the current status and where the industry is going in the future. The reading assigned for this unit looks at the dramatic changes in the industry since the Iraq war in 2003 which created energy security concerns and subsequent favorable government policies to encourage the use of renewable fuels. Concerns over Green House Gas emissions and the negative anthropologic effect on the environment has also helped create favorable government policy for the biodiesel industry and spurred societal acceptance. However, over the years some groups have become complacent over these same issues and Big Oil has increased its fight against renewable energy putting pressure on the government to reverse the strides taken.

Consistent and stable government policy is needed to encourage investment in the biodiesel industry (and other renewable energy endeavors). In 2013 there were 206 biodiesel production facilities built in the United States with a name plate capacity of over 2.9 billion gallon biodiesel production. In 2013 the industry produced over 1.8 billion gallons of biodiesel exceeding the amount mandated by the RFS for 2013 of 1.28 billion encouraged by favorable national tax incentives. However, the tax incentives were allowed to expire in 2009, then reinstated and retroactively extended until 2013 when in December of 2013 they were allowed to expire again. This instability negatively effects investment in new facilities and negatively effects current production facilities forcing some to scale back or close production and reduce employees.

There was a shift towards favorable Legislation on a State level over this period due to proven increased economic development experienced from the biodiesel industry. Illinois is a leading state in the use of biodiesel blends (particularly B11) due to favorable state tax exemptions for petroleum marketers.

There has been a tremendous growth in the Biodiesel industry in the recent past because biodiesel reduces our dependence on foreign oil, improves the environment, and creates favorable economic development and job creation. New technologies and improved agricultural practices are encouraging for the industry and yet the future growth of the industry remains somewhat unknown.