Biodiesel’s Two Decades of Growth in Illinois

by Tom C. Doran (AgriNews) Through the foresight of farmers campaigning for a sales tax exemption over two decades ago, biodiesel production in Illinois has increased fifteenfold. The Illinois Soybean Association through the checkoff played a major role in pushing for the state lawmakers to approve legislation establishing the biodiesel sales tax exemption in 2003.

The impact of that legislation for Land of Lincoln soybean growers is apparent in the data.

According to the U.S. Energy Information Agency, biodiesel production of any note began in Illinois in 2001 with 2.898 million gallons produced and increased to 2.982 million gallons the following year.

In 2003, the year biodiesel tax incentives legislation moved through the General Assembly, production reached 3.99 million gallons.

One bushel of soybeans can yield approximately 1.5 gallons of biodiesel, according to the U.S. Department of Agriculture’s National Institute of Food and Agriculture Cooperative Extension.

As part of its 60th anniversary series, ISA representatives reflected on the opportunities it created for soybean growers.

“Soybean farmers built a brand new industry that didn’t exist before the investment of the checkoff,” said Rebecca Richardson, MARC-IV Consulting regulatory and education specialist and former ISA director of operations.

“With the advent of the Food and Drug Administration’s labeling of trans fats in the early 2000s, there was concern that there would be even further degradation of pricing for soybean oil, which ended up happening.

“So, farmers saw far enough ahead to know they were going to need to invest in ways to create new uses for the soybean oil aspect.”

“Biodiesel stands out because it was the first large volume, new use that was developed using checkoff dollars, and then the regulatory framework for success was developed by the association,” said Ron Kindred, ISA chairman and Atlanta, Illinois, farmer.

"In 2003, we were able to accomplish and the governor signed our bill into law that provided a sales tax incentive for blends both below and above B10. That was why B11 was born, because any blend above B10 got a complete sales tax exemption for every gallon that you purchased that had any blend above B10 in it.”

Rob Shaffer, an El Paso, Illinois, farmer, American Soybean Association director and former ISA director, noted the return-on-investment created by biodiesel.

“To me, the best ROI on a checkoff dollar is biodiesel, and the reason being is I can do the math back to my farm where biodiesel adds $1 per bushel to every bushel I raise. So, if I raise 50-bushel soybeans, I get $50 an acre just from biodiesel,” Shaffer said.

The B20 Club of Illinois, a partnership between ISA’s checkoff program and the American Lung Association, has played integral part in promoting the use of higher blends of biodiesel.

The club represents a diverse group of Illinois fleets, companies and organizations dedicated to cleaner air and more sustainable operations through production and use of biodiesel.

“The B20 Club is a collaboration, it’s a partnership between primarily the American Lung Association and the Illinois Soybean Association. The reason why we have that partnership is because we were looking for a strategy to target fleet managers, and fleet managers don’t necessarily intersect with farmers very often,” Richardson said.

“There was really no reason not to use B20, except for the fear factor of just the unknown. That was what the B20 Club was really about, to target a few fleets to talk about their experiences to other fleet managers that would reassure them that they could try it without too much risk.

“We started with B2, B3, and now, only 20 years later, we’re at B20, and I just feel so proud about that accomplishment.”

“We’ve still got a tremendous future for biodiesel. I see big potential markets in the rail industry and in the maritime industry that can utilize biodiesel going forward,” Kindred said.

“With the new products, renewable diesel and sustainable aviation fuel, we’ve only just begun. We’re broadening that area of alternative fuels in a way that it’s going to make the world a lot better place for my kids and my grandkids, and what better thing could you hope for than that,” Richardson said. READ MORE