Biodiesel industry sets aggressive goal — 10% of on-road market

Source: Amanda Peterka, E&E reporter • Posted: Thursday, February 7, 2013

LAS VEGAS — The biodiesel industry has its sights set on providing 10 percent of the nation’s on-road diesel within a decade.

The target is a “stretch goal but yet attainable,” National Biodiesel Board CEO Joe Jobe told an annual industry conference here yesterday.

Last year, biodiesel companies produced a record 1.052 billion gallons, topping the 2011 amount by 6 million gallons, according to U.S. EPA. Biodiesel accounts for about 3 percent of the 38-billion-gallon on-road diesel market.

“It is not about replacing every drop of petroleum,” Jobe said. “It is about continuing to diversify transportation energy so we can meet our needs affordably and sustainably.”

Biodiesel is made from soybean oil, animal fats or recycled food grease. It is blended with petroleum-based diesel for vehicles and can be used by refiners to gain credit under the renewable fuel standard.

Eight years ago, the biodiesel industry set a goal of becoming 5 percent of the diesel market by 2015. When announcing the new goal yesterday, Jobe said that he expected the industry to hit 5 percent earlier than expected.

In a speech that recalled the beginning of the biodiesel industry 20 years ago, Jobe said he believes biodiesel is now in its “early adulthood.”

“It may be only moving onto junior college for now, but we’re definitely more mature, more sophisticated and turning the page to an exciting era for the industry,” Jobe said.

The industry is committed, he said, to fending off attacks on the renewable fuel standard, which EPA uses to set production levels each year for traditional ethanol and advanced biofuels. EPA this year is requiring biodiesel companies to produce 1.28 billion gallons, an increase over the 1 billion gallons it required in 2012. Oil industry groups have challenged the requirement in court.

“Those attacks will keep coming, and they’re about to get worse,” Jobe said. “We’re determined to show that this program is good policy.”

The legislative priorities for biodiesel in 2013 largely remain the same as last year, Jobe said. Along with protecting the renewable fuel standard, the industry will push for a multi-year extension of its production tax credit, which expired at the end of 2011 and was reinstated for the year by the “fiscal cliff” deal.