The View from the Top

U.S. biodiesel production takes the lead
By Erin Voegele | April 21, 2011

A report compiled by Hart Energy Consulting’s Global Biofuels Center ranks the U.S. as the top biodiesel producing nation in the world, with 1.56 billion gallons of capacity currently in operation. According to the report, titled, “Global Biofuels Outlook to 2020,” Germany is ranked at No. 2, with 1.3 billion gallons of capacity in operation. Spain, Indonesia and Brazil round out the top five biodiesel producing nations. Hart Energy Consulting reports that Brazil’s production capacity is positioned to grow dramatically in 2011 and 2012, and in fact, already features 70 percent as much production capacity as the U.S.


The report also states that the majority of the U.S.’ biodiesel capacity is not producing fuel. “It should be noted that only 10 percent of existing biodiesel capacity in the U.S. is currently producing,” says Tammy Klein, Hart Energy Consulting’s assistant vice president. “The primary reason behind the 10 percent utilization rate has been high feedstock prices and the federal biodiesel tax credit was not renewed until Dec. 17, 2010.”


According to the report, global supplies of biodiesel will need to double by 2020 in order to meet the requirements of government programs, such as the RFS2, that are being implemented around the world. Fewer facilities are expected to be built over this timeframe, said Hart Energy Consulting. However, production at existing facilities is expected to increase. The company also notes that it expects to see continued industry consolidation over the next decade, with some facilities shut down for good.


Due to excessive biodiesel capacity present all around the world, Hart Energy Consulting says it expects to see most countries focus on their own internal markets. This includes the possibility that some countries, such as Brazil and Argentina, could increase national biodiesel blending limits in order to absorb excess capacity that would otherwise be exported, thereby supporting local industry.
The report addresses the biodiesel industries of five regions and 30 countries, including the U.S., Australia, Canada, and New Zealand, as well as a wide variety of countries in Europe, South America, and Southeast Asia. In addition, the report looks at other regions with production potential, including California, Sub-Saharan Africa and Central America.

 
 
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