Biodiesel Industry, Biofuel Industry, Biomass Industry

What is Biodiesel?

Biofuel is the term used for liquid renewable fuel that is derived from plant matter rather than being fossil based. Biodiesel, a form of biofuel, is made from soybean or corn extracts. Biodiesel is an excellent option for vehicles that run on gasoline as well as those that run on diesel.

[br]The huge strain on fossil fuel is more than apparent through the soaring gas prices, which seem to hit record highs every few months. The US is one of the largest importers of petroleum and other fossil fuels – a fact that was brought home after the attack on the World Trade Tower in September 2001. The public finally began to appreciate the implications of the nation’s overdependence on oil imports, especially from the Middle East.

Unfortunately, for a country that almost totally relies on petroleum based sources of energy, it would need huge effort from governmental agencies as well as the private sector not only to create awareness among the public but to fuel the move towards the use of renewable energy sources. And what could be better than biodiesel in easing the move from fossil fuels to plant-based fuels. The biggest advantage of biodiesel is that it can be used across the widest range of vehicles, without the need to modify the engines. Also, other forms of renewable energy, such as solar, geothermal and wind, are not feasible alternatives to petroleum-based fuels, especially for vehicles.

What are the prospects of the Biodiesel Industry?

Government initiatives across Europe have created huge public awareness of Biodiesel in the continent. In the US, however, the biofuel movement still needs a push, with most lay people being unaware of the renewable energy option available to them. The biodiesel industry received its much needed impetus from President George W. Bush at the National Biodiesel Board conference in 2005. In the same year, President Bush signed an executive order that made it mandatory for all non-tactical military vehicles to use biodiesel wherever available.

Another little known fact about biodiesel is that it can easily replace petroleum-based fuels for almost all energy needs, such as use as heating fuel, use in mining operations, use in farm equipment, etc. Imagine the vast market just waiting to be exploited only if the public can be weaned off its addiction to petrol.

The good news is that the US government, having realized the potential for biodiesel, has been promoting this industry over the past few years. The FY 2007 Budget allocated $50 million for clean diesel programs and $11 million for the implementation of the Renewable Fuels Standard. The Energy Policy Act of 2005 includes biodiesel, along with other forms of renewable energy, for tax credits through FY 2008. In fact, according to Stephen L. Johnson, Administrator of the Environmental Protection Agency (EPA), the US is on the verge of witnessing a huge change in terms of how people power their cars, homes and businesses.

Biodiesel – a Growing Industry

RenewableEnergyWorld.com has quoted Jenna Higgins, Communications Director of the National Biodiesel Board, as saying at the 2005 conference, “…biodiesel is absolutely one of our best tools to make a difference in energy supply and works with what we already have. It can play a valuable role in diversifying our energy supply and increasing the amount of fuel that is domestically produced. It’s here today and it works immediately. For an alternative fuels to be successful it has to work with what we have.â€

[br]Today the biodiesel industry has no single key player – the operations seem equally distributed among both large and small producers. However, from 500,000 gallons of fuel produced by the biodiesel industry in 1999, the figure is likely to have risen to 450 million gallons in 2007. While Iowa has the highest estimated capability for biodiesel production in the US, Renewable Energy Resources Inc., a renewable energy production and delivery company, believes that the West Coast and Texas could be the largest domestic users of this fuel.

The past couple of years has, in fact, seen a huge surge in the demand for soy oil, which is the primary source of biodiesel. Federal tax and blending credits have played a key role in the growth of this sector. From being largely a produce of the Corn Belt, the biofuel industry is now gaining impetus across 41 US states. Prices of soybean oil have accordingly soared over the past year. But these prices are expected to gradually decline as more and more players jump into the fray.

The US Biofuel Market Analysis, published in April 2008, highlights the crucial role played by the government’s stand on increasing the use of renewable energy sources in the growth of the biodiesel industry. The key findings of the market analysis are:

• The US biofuel industry, specifically ethanol production, is expected to dominate global production during 2008-2017.
• Corn is expected to play a key role in future ethanol production in the US and cellulosic ethanol requirements are expected to surge during 2008-2017.
• The US biodiesel sector needs strong support from the government as well as from technology to sustain future growth.
• Biodiesel prices in the US are likely to witness a declining trend, which will give an impetus to commercial use during 2008-2015.
• Supply of raw material (corn and soybean oil) will be a major concern for the US biofuel industry in the coming years.

Although biodiesel is not the answer to all our fuel shortage concerns, it certainly will play a major part in providing alternative fuel solutions for meet the growing demand. The biodiesel industry is likely to also play a pivotal role in creating jobs, providing the much needed support to farmers, reducing harmful fuel emissions that clog the atmosphere today and of course give us greater energy security by reducing dependence on fuel exports.

This is the time to cash in with the green wave. What Rudolph Diesel had demonstrated in 1900 is finally becoming reality – the diesel engine can work as easily on plant fuels as it does with fossil fuel. This burgeoning industry needs all the production and distribution support it can get. So, what are you waiting for?