Biodiesel Industry Plans for Future Growth – Soy to play the leading role
The National Biodiesel Board recently announced our new vision to be a 6-billion-gallon industry by 2030. This vision more than doubles production of biodiesel and renewable diesel in the next decade and sets the industry on a fast growth trajectory to find feedstocks to supply that demand. Biodiesel and renewable diesel’s growth projections mean good news for soybean farmers.
Biodiesel is already a leading soybean customer and its demand for soybean oil grew 300 percent in the last 10 years. Additional production will drive even more soybean oil to be used for this market, which is a good thing for your bottom lines.
There has been a lot of discussion about the impact COVID-19 is having on agriculture and renewable fuels. We have shared your concerns, especially as the animal agriculture industry had to sort through the challenges posed by closures across the restaurant and food service industries. The biodiesel and renewable diesel industries were deemed essential industries by Homeland Security. With that designation, our member plants have remained in operation and supplying high quality fuels to the marketplace. In fact, a month-on-month comparison of production volumes between 2020 and 2019 show that production is up in 2020. This is an amazing feat in the face of a global pandemic and something for all of us to be proud of.
Even in the face of historic challenges, soybean oil continues to be the golden standard for biodiesel production. Biodiesel is the most researched renewable fuel on the planet, thanks in part to soybean farmers and their checkoff. As markets see a growing demand from coast to coast, the biodiesel industry, and a growing renewable diesel industry, will need a lot more soybean oil in the near future.
Today, biodiesel uses approximately 9 billion pounds of soybean oil, which is over a third of the oil available from crushed soybeans in the U.S. For us to reach our 6 billion gallon a year vision, we are projecting biodiesel and renewable diesel could need over 18 billion pounds of soybean oil in 2030, making it soy oil’s largest customer. With increased protein demands worldwide, soy’s popularity continues to rise. But the protein need far outpaces the need for oil, leaving a surplus of soybean oil on the market, and that trend will continue in the next decade.
Soybean farmers have worked hard to build the biodiesel industry, literally from scratch, starting nearly 30 years ago. That hard work has included a significant investment in the National Biodiesel Board through the soybean checkoff program to support the necessary technical, communications, environmental, and promotional efforts. Were it not for this investment in the early days, we would not have a biodiesel industry in the U.S. I am grateful for that ongoing support and the collaboration our industry continues to enjoy with the soybean industry. I am also grateful for the strong leadership the soybean industry continues to provide to NBB. South Dakota’s very own Tim Ostrem serves on our board of directors today, I thank him and your promotion board for sharing this critical leadership to help our industry continue to thrive.
Biodiesel has proven to be a consistent, strong, and growing customer for your soybean oil, and we look forward to even more growth in that market. Together biodiesel will remain better, cleaner, and available now to all.
By Donnell Rehagen, CEO, National Biodiesel Board