Back to Business in 2011

By Joe Jobe | March 09, 2011

Thank you to everyone who participated in the 2011 National Biodiesel Conference & Expo. What a great conference, and what a great chance to get back to business. The tremendous activity in the RIN and biodiesel markets immediately following the conference is a testament to the critical role the conference has come to play as a nucleus for serious business in the biodiesel sector. This month I thought it might be valuable to summarize some thoughts, observations, and outlook that came out of the conference, including my own remarks at the event.

It has been my privilege to serve as the CEO of the National Biodiesel Board for 12 years. I’ve seen tremendous change in this industry, but the most dramatic change has occurred over the past 36 months. From the irrational exuberance that we saw in 2008 with almost 4,000 people at our conference in Orlando, to the industry contraction we saw in 2009 with the melt down of the economy, to the uncertainty and instability that we faced in 2010. 

That uncertainty in the industry in 2010 was very difficult, frustrating and disappointing. But this past year was something else too. It was a testament to this industry’s determination not to give up, no matter how hard it gets. It is probably the main reason I am so proud to work for this industry. We don’t give up. We never have and never will. 

With these two rough years behind us, the industry is positioned for 2011 to be the best production year ever. We finally have all of the elements in place for a more stable and predictable year. All of the delays and uncertainties that have plagued the start of the RFS2 have now been eliminated, and the path is set for what will effectively be the first full year of the program. Because of the research support of the soybean checkoff, biodiesel from the vast majority of available domestic feedstocks has conclusively been deemed an advanced biofuel. And currently biodiesel is the only domestically produced advanced biofuel that has reached nationwide commercialization, produced in virtually every state and throughout Canada. With the U.S. EPA announcement that it will enforce the 800 million gallon volume requirement in the biomass-based diesel category, the courts upholding the program against the major legal challenge and the reinstatement of the tax credit, the stage is set for the RFS2 to hit 2011 with full force.

With both the tax credit and the RFS2 firmly in place this year, we have a tremendous opportunity for renewal. Clearly, RFS2 will be a critical policy driver for our industry. The NBB is committed to the program’s success. We have taken dramatic measures to help prepare the industry for this program by conducting countless training webinars andface-to-face meetings, often in conjunction with the EPA and our partners in the petroleum industry. 

While the future of the biodiesel tax credit is uncertain at the end of the year, it is important to remember that it has been one of the most effective pieces of energy policy and economic policy in U.S. history. It has stimulated investment in renewable refinery capacity, jobs and economic activity that generated a substantial net benefit to the U.S. treasury. It has fueled innovation in technology, research andplant science. It is good public policy and it has produced all of these benefits in just five years. 

We must continue to remind people that the biodiesel tax credit and the RFS2 are complementary programs. They are designed to operate in tandem, providing both the economic incentive to stimulate markets and the stability and predictability needed to launch an emerging industry operating in the inherently unstable energy market. This is the first year that these two policies will effectively be allowed to operate together. This industry still believes in the vision and promise of this policy framework, and the NBB is going to put in place every resource at our disposal to get this tax credit extended this year.

We would be foolish to expect that this year is going to be all smooth sailing. We will have our challenges. As NBB Chairman Gary Haer detailed in his speech at the conference, the challenges we will need to address include fuel quality, RIN integrity, affordable feedstock supplies and more. In fact, much of the hard work and homework that needs to be done on behalf of our industry is all about preparing for success. 

We have worked for more than five years to finally have in place the policy framework that we have right now. It is a powerful policy framework, one that will put this industry back on a sound footing. But it is not enough to simply achieve success. You must anticipate it and manage it once you’re there. 
The most important resource in these efforts is the people in the industry. It is all of us collectively staying unified and continuing to pull together as we have demonstrated that we can do, even through the toughest of times. We have to do the hard things that will ensure that this year is a success regardless of the circumstances, and that we are prepared for that success. We have an extraordinary opportunity before us and we have to deliver, no matter what.

Joe Jobe, CEO, National Biodiesel Board

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