Biodiesel

Updated: October 10, 2016

Current Situation

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 2.1 billion gallons of biodiesel in 2015, reducing carbon emissions by 18.2 million metric tons – the equivalent of removing 3.8 million cars from the road.

Domestic demand for biodiesel accounts for more than a quarter of all soybean oil use in the U.S., with biodiesel consumption in 2015 requiring 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, showing tremendous growth in market potential over the past decade.

The biodiesel industry supported $8.4 billion in U.S. economic impact in 2015, along with nearly 48,000 jobs and $1.9 billion in wages paid.

Although domestic users consumed more than 2 billion gallons of biodiesel in 2015, only 1.26 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 each year under the federal Renewable Fuels Standard (known as RFS2). RFS2 requires this volume to reach 1.9 billion gallons in 2016 and 2 billion gallons in 2017.

The biodiesel industry has set a goal of supplying 10 percent of the nation’s 40-45-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 – poultry and livestock farmers – by lowering the price of soybean meal by 21 dollars per ton.

Key Points

Facts & Figures

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