The State of U.S. Biodiesel: Up the Creek Without a Paddle?

by Joshua Kagan (GreenTechMedia) ...Although biodiesel has many positive attributes, it is not immune from the criticisms leveled at first-generation ethanol, specifically the "food vs. fuel" debate. Biodiesel production uses at least 10% of the U.S. soybean crop and 60% of European rapeseed oil for what amounts to a relatively limited impact on the overall diesel market. That is, global biodiesel was 4.1 billion gallons in 2008 -- about 1.5% of the 265 billion gallons of diesel consumed in that year.

The last 18 months have been a very difficult stretch for U.S. biodiesel producers.

Subsidized U.S. biodiesel flooded the EU market in recent years, resulting in estimated U.S. exports of 550 million gallons in 2008 -- accounting for approximately 19% of total E.U. biodiesel consumption in 2008. In 2009, the EU responded with an anti-subsidy tariff (€237/MT, which translates to $0.78 per gallon) and an anti- dumping duty (€208.20 per MT -- $0.68 per gallon) that essentially locked out U.S. producers from Europe.