U.S. Biodiesel Producers Weathering Pandemic Well

In early December, as the first “year of COVID” ended—while the pandemic raged on pre-vaccine—our team at Biodiesel Magazine reached out to biodiesel producers with a simple set of questions: We asked how things were going, how morale was holding up, what condition their operation was in, and how severely—if that was even the right word—COVID-19 had impacted their business.

We didn’t expect a huge response, and few producers initially answered. But after a second (and then a third) e-mail to every biodiesel and renewable diesel plant in the U.S., the responses started to trickle in. Before long, we had enough of a participant sample (and I hesitate to use such statistical terms for our surveys) to justify sharing the results with our readers. In the end, only one-fifth of active U.S. biodiesel producers took part in our survey, but the insight extrapolated from their input seems both relevant and timely.      

The feedback we compiled, detailed in our cover story, “Holding Strong," tells the story of a resilient industry that didn’t so much suffer directly from COIVD-19—because diesel use held steady—but rather indirectly through a slackened compliance pull. Most producers said their facility was online and producing close to full capacity in December, while nearly a third said their plant was running at a reduced rate.

There was plenty of good news to report from the survey. Generally, U.S. biodiesel plants have managed the pandemic well, keeping production online and people working. In fact, only 20% of producers surveyed laid off or furloughed employees in 2020; eight out of 10 respondents said their facility was still hiring; most reported only moderate hits to their business operations; and many are investing in new technologies, right now, despite the ongoing health crisis.

It’s been said that “where you stand depends on where you sit,” and that fairly describes biodiesel producers right now. While most surveyed said they believe the industry was, in fact, harmed by the pandemic and in the early stages of a months-long recovery, about one-fourth of them said they didn’t think there was anything to recover from.

The political opinions of U.S. biodiesel producers are also mixed. A majority of survey takers expressed optimism about the incoming Biden Administration—rooted mostly in the idea that Biden’s EPA will manage the Renewable Fuels Standard (i.e., volume obligations and small refinery exemptions) more fairly than the agency did under Trump. In the words of one respondent, the copious approval of SREs was “the No. 1 item facing the industry and adding uncertainty.” 

Among the top concerns of producers heading into 2021, was the availability of feedstock. Given the extraordinary size of the currently expanding and under construction renewable diesel plants in the U.S. (check out “Renewable Diesel’s Rising Tide"), their concern is perhaps understandable.

Author: Tom Bryan
Biodiesel Magazine