Optimistic Outlook: Biodiesel Producers in North America Have Their Eyes Set on Hitting a US Output Target of 6 Billion Gallons, Much Earlier than Originally Planned

(Biofuels International) ... After securing a 3 billion/gallon output last year, production across the US is on track for 4 billion this year with power to add, according to Paul Winters, director of public affairs and Federal Communications for Clean Fuels Alliance America.

“Our vision is to achieve 6 billion gallons of production and use in the US by the end of the decade and we're anticipating that this will be secured ahead of schedule,” he told Biofuels International.

“Although some biodiesel facilities have closed over the past year, for individual company reasons, others have come online enabling production levels to hold steady.

That’s against a background of growing outlets for biodiesel across a number of markets, such as marine fuel, jet fuel, heating oils, emergency electricity generators and others.

“Instead of producers going out to convince customers to buy from us, therefore, they are approaching us and looking to us to meet their demand. This has created renewed optimism across the industry with growth to 6 billion gallons now anticipated to be met well before 2030.”

“Our director of environmental science has calculated that if we delay tackling carbon reduction by five years, countries will have 13 times more work to do to correct emission levels through new carbon reduction processes when they finally arrive.

“That’s compared to taking action today. The simple fact is that we have a low carbon fuel that can cut carbon emissions right now and it’s growing in availability.

“We also don't believe that electric engine technology is going to come online fast enough for all the markets that need attention, such as agriculture, shipping, railroad and electricity generation itself.

“New developments are just not going to arrive fast enough to reduce carbon at the rate that we need to reduce it by. It makes sense, therefore, to use available low carbon fuels in existing engines now.”

The Washington Clean Fuel Standard, for example, introduced in 2021, has made an impressive start, judging by its initial first-quarter results for the number of credits generated by alternative low-carbon fuels.

Preliminary data shows that biodiesel and renewable diesel contributed around 22% of the standard’s credits, indicating an approximate blend rate of 1.2%.

“New York City is probably even closer with people already looking at the Californian example and asking, ‘why aren’t we doing that here’.

“New York, Rhode Island and Connecticut have also all adopted standards for heating oil, so are looking to replace the fuel oil and heating equipment in their States with biodiesel.

Another frustration for the US biodiesel industry is the delayed release of federal guidance on how low carbon fuel users should calculate the application of new tax credit incentives to their businesses.

Having been promised by the US Treasury Department and Internal Revenue Service that guidance would be provided before the start of this year, companies are still waiting.

The delay centres on which calculation model to use, a decision which now looks set to take until December, or even January next year, to resolve.

The credits, which also apply to other fuels, not just biodiesel, were introduced as part of the Inflation Reduction Act (IRA) which was signed into law in August last year.

Biodiesel producers in Canada, meanwhile, are looking to benefit from the Federal Government’s Clean Fuel Regulations (CFR) which came into effect in July 1. Six years in the making, the new regulations appear to have been well accepted by the industry. READ MORE