Biodiesel (Still) Paving the Way for Next-Generation, Low-Carbon Biofuels

March 18, 2024

National Biodiesel Day is celebrated on March 18 to commemorate Rudolf Diesel, the inventor of the diesel engine. Diesel’s first engine ran on a farmer-produced feedstock - peanut oil.

“The use of vegetable oils for engine fuels may seem insignificant today,” Diesel said in 1912, “but such oils may become - in the course of time - as important as the petroleum and coal tar products of the present time.”

Diesel’s words ring true today.

For 2023/2024 USDA estimates nearly 13 million pounds of soybean oil (or more than 1 million acres of soybeans) are being used to produce biodiesel to replace petroleum diesel.

Photo courtesy of United Soybean Board

As farmers in South Dakota know, the soybean oil market is about to look a lot different with the addition of a new local crush facility. For more than 20 years, biodiesel producers have been building a foundation for what’s coming in a new future of the low-carbon fuels marketplace. But biodiesel’s time is not up according to a panel of experts at the recent Clean Fuels Alliance America conference.

Clean Fuels represents biodiesel, renewable diesel and sustainable aviation fuel marketing and policy efforts. While all three low-carbon fuels can be produced from soybean oil, Midwest biodiesel producers shed light on the evolving landscape of clean fuels during a conference panel.

Gary Lewis, President and CEO of Seaboard Energy, emphasized the pivotal role of biodiesel in laying the groundwork for the industry's growth. He stated, "Biodiesel laid the groundwork for [renewable diesel] and sustainable aviation fuel (SAF), and in many respects, [they] are now raising the profile of biodiesel."

Brad Wilson from Western Iowa Energy noted, "Renewable diesel is better with biodiesel, and biodiesel is better with renewable diesel when you blend the two."

The panel highlighted positive policy changes impacting biodiesel producers. Kerry Fogarty from Incobrasa Industries in Illinois expressed optimism about the conversion of the federal blender's tax credit to a producer credit, which incentivizes domestic production.

"The higher value of the tax credit will be based on the carbon intensity of feedstocks and energy usage, aligning with the industry's efforts to reduce carbon emissions,” said Wilson.

The panelists also underscored the importance of diversification within the biodiesel market. Lewis emphasized the versatility of biodiesel products, stating, "There is a marketplace for all these different products."

Clean Fuels has recently touted new partners in the marine and railroad industries, announced celebrity endorsement for Bioheat from Donnie Wahlberg and introduced PepsiCo as a new Clean Fuels Alliance America member alongside state associations like South Dakota Soybean.

While the industry is facing uncertainty from EPA regulations on renewable volume obligations and state policies requiring low-carbon fuels, the outlook for soybean oil-based fuels is exciting. As biodiesel continues to evolve and adapt to changing market dynamics, soybean producers should be proud that their homegrown fuel remains a cornerstone of the clean fuels landscape.