Biodiesel

Updated: April 21, 2017

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 2.9 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.

Key Points

Facts & Figures

Other Resources