Chip Flory: Green Fuel Drives the Future of Soybeans

April 07, 2022

Print This Article Share it With Friends

by Chip Flory (AgWeb) The soybean industry continues to prep for what’s expected to be demand growth for renewable diesel, sustainable aviation fuel (SAF), “green” marine fuels and higher blends of biodiesel in home heating in the eastern U.S. Here are a few numbers for perspective:

Soybean oil use for biofuels was 8.66 billion pounds in 2019/20, increased to 8.85 billion pounds in 2020/21 and is estimated at 11 billion pounds in 2021/22.
Soybean oil use for food, feed and other industrial uses was 13.66 billion pounds in 2019/20, 14.47 billion in 2020/21 and is projected to slip back a bit to 14.15 billion pounds in 2021/22.

With expansion of existing facilities and increased efficiency, soybean oil production increased from 24.91 billion pounds in 2019/20 to an estimated 25.91 billion pounds in the current marketing year. Soybeans crushed increased from 2.17 billion bushels in 2019/20 to an estimated 2.19 billion bushels this year.

The only reason soybean oil ending stocks haven’t been drained is because U.S. soybean oil exports have been cut in half from 2019/20. They are estimated this year at 1.43 billion pounds.

THE NEED FOR GREEN

Those most optimistic about the future of renewable diesel, SAF and green marine fuels say total feed stocks of 40 billion pounds will be needed in five years. Since other sources of fats, oils and grease are expected to hold steady in the future, refiners will rely on the vegetable oil market to provide needed supplies.

...

Soybeans from the 2023 crop will be in much higher demand to feed new capacity.

...

If these crush plant locations, which are in the planning or construction phases, all make it to production, they’ll add about 400 MILLION BUSHELS of domestic soybean demand by the start of 2025.

crush plants

All this means one thing — soybeans will be bidding for U.S. acres in the next three years (and longer) to feed crush expansion. READ MORE

Fuel the Crush: Renewable Diesel Pumps Up Soybean Demand (AgWeb)

How Will A Surge in Bio-Based Fuels Impact Grain Demand? (AgWeb)

Global Clean Energy Holdings, Inc. Receives Funding from ExxonMobil to Advance Renewable Diesel Production and Camelina Expansion (Global Clean Energy Holdings/Business Wire)

Excerpt from AgWeb: BIG OIL INVESTS IN AGRICULTURE
The difference in renewable diesel versus ethanol or biodiesel is a framework already in place. “This is not building a new industry,” Basse (Dan Basse, president of AgResource Company) says. “Instead, we are retrofitting an existing industry with people who have a lot of money.”

...

Future growth will come as previous petroleum refineries are converted to produce bio-based fuels. These plants are owned by some of the largest energy companies in the world.

“The biggest risk for these companies is assuring enough feedstock,” Basse says. “That’s why we are seeing these firms partner with prevailing producers of soy products.”

...

Energy companies investing with ag companies include:

Chevron partnering with Bunge to expand facilities in Destrehan, La., and Cario, Ill.
Love’s entering a joint venture with Cargill to build a plant in Hastings, Neb.
Marathon partnering with ADM to build a soybean plant in Spiritwood, N.D.

In Iowa, Phillips 66 has invested in Shell Rock Soy Processing, which broke ground last year. In return, Phillips receives access to 100% of the plant’s soy oil, says Mike Kinley, managing member of Ag Development Group.

...

Renewable diesel could revolutionize the U.S. soybean industry, says Pete Meyer, head of grain and oilseed analytics, S&P Global Platts.

“We will start crushing for oil instead of meal by 2025,” he says. “The U.S. export system will have to evolve, and that means U.S. soybeans and soy oil stay here and all that soy meal is exported.”

...

Canola is a promising feedstock, although EPA has yet to approve a pathway for canola-based renewable diesel, but that will change as the industry grows and more feedstocks are needed. READ MORE