Biodiesel Roars Back with Mandate, Tax Credits, B20 OKs
by Jim Lane (Biofuels Digest) …“The EPA has said that they are going to enforce the 800 million gallon volume RFS2 requirement” said National Biodiesel Board CEO Joe Jobe to Biodiesel magazine, “and we will have the tax credit in place. Last year we had neither in place.” He described the combination as a “powerful policy framework” and predicted that 2011 would be the biggest year yet for US biodiesel sales.
At the same time, more good news on vehicle acceptance. Jobe is touting that “We’ve got all of the Big Three American automakers accepting B20 in their vehicles.”
At the same time, there are challenges on the feedstock front. Bottom line, jatropha, camelina and algae are still emerging feedstocks, soy and canola are pricey, waste oils & greases are tough to find at scale, and palm is politically radioactive.
…Plus, the biodiesel industry has been operating at a fraction of its capacity – somewhere in the range of 20-25 percent, the past year or more, and that capacity is not going to just snap back. Plants have to be restarted, teams have to be re-trained, and some companies with less than stellar production efficiencies, feedstock options, or production scales may not ever come back.
…We note research that has just come to light from ARS, determining that farmers can provide for their own farm-based fuel needs by devoting roughly 5-7 percent of their land to bioenergy production.
Produced at cost, we believe that channel, combined with the existing mandates which utilize feedstocks sources developed for the commercial market (such as brown and yellow grease, and energy crops), represent the near-terms “wins” for biodiesel. Farmers utilize an estimated 1 billion gallons of diesel fuel picking up the US corn and soy harvest – B100 used for this channel, and roughly B2 for the general market, would give biodiesel a very big push, and in the mid-term we may well see revolutions in feedstock availability from the likes of algae and new oilseeds crops to advance the story even farther. READ MORE