The State of Biodiesel in 2017

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Many were uncertain what 2017 would hold for the renewable energy sector. However, the U.S. Government has  supported the Renewable Fuel Standard (RFS) program for 2017 according to the National Biodiesel Board (NBB). This is the trade association that represents biodiesel industries, fuel distributors, and feedstock suppliers.

Biomass based diesel (biodiesel) provides the largest share in renewable energy demand satisfying up to 10% of the global demand for energy in industrial machinery and transport fuel. Made from animal fats, recycled cooking oil, and soybean oil, biodiesel is a clean and renewable energy source that can be used in diesel engines without being modified. In 2016, the production of biodiesel was very high compared to 2015, and the first half of 2017 has not performed poorly either. 

With the increasing advantages of biodiesel, it is not only the US that is growing production. Other countries such as China and India have scaled up energy production in 2017. The use of biodiesel in the United States is supported both by the federal renewable energy standard and the Agricultural Act making the US continue being the largest producer of biofuels. Most companies have adopted the use of biodiesel for operations. A high supply of biodiesel will cause the prices of this fuel to go down. As a result, people will invest more demanding construction and manufacturing services thus pushing up the revenues.

Biodiesel 2017 Analysis 

The 2005 Energy Policy Act, Section 1508 directs the EIA to give periodic reports on renewable fuel production. These include Biodiesel production reports from the biodiesel industry in the US. The data collection is done by region and state by selected cases around the country. 

This data is meant to analyze the performance and growth of the biodiesel industry. The importance of this growth data is to ensure that objectives of the 2005 Energy Policy Act Section 1508 and the1992 Energy Policy Act Section 503 are being met. Monitoring is done by Congress. 

On 23rd November 2016, the target for biodiesel requirements was set by the EPA for 2017. Since the achievements for 2016 had been way above what was expected compared to 2015 because of the fall in production in 2015, the targets for biodiesel were set at the same level in anticipation for a rise or a fall. The final renewable volume obligation for biodiesel was proposed at 2.0 billion gallons for 2017. This category was the only one that the RVO for 2018 was proposed. It was set at 2.1 billion gallons for 2018. The statute had stated that the minimum annual RVO for biodiesel would remain at one billion gallons since 2012, but these targets were way above that figure. The 2017 total volume requirement for renewable energy was 19.28 billion gallons. This figure was 2.6% higher than the 18.8 billion gallons that had been proposed in May 2016 and reflected 19.7% less of the 24.0 billion gallons that were stated in the statute. 

2017 Half-Year Statistics 

The survey on Biodiesel Production collects information on the following categories: 

• The plant location and annual production capacity of 100% biodiesel (B100)

• The total production of biodiesel 

• The feedstock, catalysts, and alcohol used in biodiesel production

• The sales of blended biodiesel and 100% biodiesel B100 from biodiesel production plants

• The total sales of biomass based diesel to final the users

This data is sought from registered biodiesel producers. 

Production 

98 biodiesel plants were operational in the first half of 2017. They have a capacity to produce 2.3 billion gallons of biodiesel per year and the total U.S. biodiesel production was at 149 million gallons by August 2017. Biodiesel production by August 2017 was the same as the number in July 2017. 68% of the total output from the US came from the Petroleum Administration for Defence District 2 which is the Midwest region. 149 million by midyear is not a good indicator that the target will be met by the end of the year.

Feedstocks

Soybean oil was the biggest feedstock for production of biodiesel by August 2017. 608 million pounds were used for this production. The total amount of feedstock used for production by mid-year was 1,140 million pounds. Other feedstocks used were recycled oil and animal fats.

Sales 

As at August 2017, the producer sales of biodiesel were 63 million gallons which were sold as B100 which is 100% biodiesel. 89 million gallons of B100 were sold in biodiesel blends, and diesel fuel was derived from petroleum.

Within the first half of 2017, the following has been achieved:

• Renewable energy technologies have increased their spread across states and regions and most pronounced is biodiesel for home use and industrial use

• Lower cost of biodiesel has increased usage in heating and cooling across homes and industries. 

• Record numbers in the sale of biodiesel and capacity for generation have been reached within the first half of the year compared to a similar period last year. 

These numbers are good for both the biofuel manufacturers and the industrial sector. With numbers that high, the cost of production will most definitely go down. As such, investors push up the need to invest at this time. Biodiesel is the primary renewable energy in the transport sector, but electrification is also expanding fast. There is need to grow this sector fast to avoid being overtaken by cheaper non-renewable energy sources.

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