Updated: March 20, 2017
Biodiesel works as a cleaner-burning, renewable alternative to petroleum diesel, offering a viable opportunity to diversify the U.S. transportation fuel supply.
U.S. consumers used a record of nearly 2.9 billion gallons of biodiesel and renewable diesel in 2016, seeing nearly 40 percent increase from last year.
Domestic demand for biodiesel accounts for more than a quarter of all soybean oil use in the U.S.
Biodiesel consumption in 2015 required production use of 5 billion pounds of soybean oil, or the oil from 441 million soybean bushels. By comparison, fewer than 500 million pounds of soybean oil were needed to meet domestic biodiesel demand in 2005. This shows tremendous growth in market potential over the past decade.
The biodiesel industry contributed $11.42 billion in U.S. economic impact in 2016, along with nearly 64,000 jobs and about $2.5 billion in wages paid.
Although domestic users consumed almost 3 billion gallons of biodiesel in 2016, only about 2 billion gallons of the advanced biofuel were produced in the U.S. The current biodiesel tax incentive is distributed as a $1 per gallon blender’s credit.
The volume of biomass-based diesel required to be blended into transportation fuels is set under the federal Renewable Fuels Standard (RFS2) each year. RFS2 requires this volume reach 2 billion gallons in 2017 and 2.1 billion gallons in 2018.
The biodiesel industry has set a goal of supplying 10 percent of the nation’s 40 to 50 billion gallon transportation diesel fuel market by 2020. Domestic biodiesel production currently supplies about 5 percent of that market.
Why the Checkoff Cares
U.S. soybean farmers helped establish the biodiesel industry and have benefited from its growth. That’s because demand for biodiesel increases demand for, and the value of, U.S. soybean oil by 11 cents per pound, adding 63 cents of value to every bushel of soybeans. Biodiesel also works for the U.S. soybean industry’s No. 1 customer – animal agriculture – by lowering the price of soybean meal by $21 per ton.
- Soybean farmers lead the development and growth of the biodiesel industry. Through their checkoff, they fund research and promotion efforts to ensure biodiesel remains one of the most tested and used renewable fuels on the market.
- Biodiesel reduces greenhouse gasses by up to 86 percent, compared with petroleum diesel, and is made from renewable resources, such as U.S. soybean oil.
- For every unit of fossil energy it takes to produce biodiesel, 5.5 units of renewable energy are returned – the best of any U.S. fuel.
- Biodiesel is the first and only fuel commercially available nationwide to meet the EPA’s definition of an Advanced Biofuel, meaning that it reduces greenhouse gas emissions by at least 50 percent.
- Nearly 80 percent of the original equipment manufacturers selling diesel vehicles and equipment in the U.S. support biodiesel blends of 20 percent (B20) or higher in at least some of their equipment.
- Increased demand for biodiesel boosts demand for soybean oil, the feedstock used in more than half the biodiesel produced in the U.S.
- Biodiesel works for America, for the country’s rural economies, soybean farmers, and poultry and livestock farmers.
- Because soybeans can be crushed for both oil and meal, biodiesel production supports animal agriculture. Increased demand for soybean oil to make biodiesel also increases the supply of soybean meal that can be used to make animal feed. That increased supply leads to lower feed prices paid by poultry and livestock farmers.
Facts & Figures
- The U.S. biodiesel and renewable diesel market for 2016 was nearly 2.9 billion gallons.
- Soybean oil makes up about 50 percent of biodiesel feedstock.
- Biodiesel helped increase soybean value by 63 cents per bushel between 2006 and 2015. This contributed to an $18.8 billion increase in the value U.S. soybean farmers received for their soybean oil and decreased the price of soybean meal by $21 per ton.
- Increased biodiesel production lowered soybean meal prices during marketing years 2005 to 2009 by as much as $48 per ton.
- The biodiesel industry helps support nearly 64,000 U.S. jobs and $2.5 billion in wages.