A Record Year for America’s Advanced Biofuel

By Gary Haer | January 18, 2012

“Anything worth having is worth fighting for” could easily be the motto for our biodiesel industry over the last 18 months.

A healthy biodiesel industry supports and creates domestic green jobs, enhances energy security and is better for our environment and economy. In 2010 when things weren’t looking good and many were counting us out, it was the resolve of the biodiesel industry throughout those difficult months that launched the industry into its best year ever.

2011 began with all of the elements for a healthy industry in place; a reinstated tax policy complimented by state biodiesel policies, the RFS2 and strong industry partnerships.

Beginning early in the year, the industry got to work producing record volumes and meeting our nation’s energy independence goals. The strong federal policy framework, with both the tax credit and the RFS2 firmly in place, propelled biodiesel production to unprecedented levels including production volumes in the first six months of 2011, which eclipsed the entirety of 2010 total production.

Role of the RFS2: Record-Breaking Year

With the EPA announcement early in the year that it would enforce the 800 million gallon volume requirement in the biomass-based diesel category and the court’s decision to uphold the program against the major legal challenge, the stage was set for the RFS2 to go forward in full force.

Clearly, RFS2 is a critical policy driver for the industry and the National Biodiesel Board remains committed to the program’s success. In June, the EPA announced its proposed 2012-’13 volume requirements for renewable fuels. The proposal calls for increasing the biomass-based diesel program from 800 million gallons in 2011 to 1 billion gallons this year.

Through industry-wide grassroots efforts, including the support of the soybean industry, RFS2 pathways for biodiesel are open to the majority of available domestic feedstocks and biodiesel is deemed an advanced biofuel. NBB continues to consult with EPA to define future years’ volume obligations for the biomass-based diesel and advanced biofuel programs. NBB’s RFS2 Task Force studies future feedstock availability, production capacity, economics, and other factors to demonstrate to EPA that the industry can sustainably supply increasing amounts of biomass-based diesel above and beyond the original 1 billion gallons set for this and future years.

One of the main keys to a workable RFS today and for the future is RIN integrity. NBB continues to work vigorously with the EPA and our partners in the petroleum industry on this issue to maintain a strong RFS2 compliance program.

While the RFS2 is the most significant driver for increased biodiesel demand in 2011, the reinstatement of the federal blenders tax credit has also aided in infrastructure investment. Biodiesel economics supported discretionary blending throughout 2011 with blenders enjoying the benefit of strong RIN values. Together the RFS2, the federal tax incentive and state biodiesel blending policies spurred the development of infrastructure. These investments at terminal locations, blending facilities and for pipeline movements have positioned the biodiesel industry as a sustainable part of the nation’s renewable fuels goals and help to secure the long-term availability of biodiesel in the marketplace.

We Got the Word Out: We Are America’s Advanced Biofuel

Biodiesel continues to be the only domestically-produced advanced biofuel to reach nationwide commercialization, produced in virtually every state and throughout Canada. A major outreach campaign, the Advanced Biofuels Initiative, helped spread that message in 2011. This program is achieving its goals and I have received calls and emails from industry partners, customers and political thought leaders who are getting our message. The comprehensive campaign was the single largest project in the organization’s history and featured its first-ever national advertising campaign. This proactive educational campaign would not have been possible without the vision and partnership of soybean and canola producers from across the country.

Quality, Efficiency and Performance Continue to Improve

Other NBB efforts included state initiatives, sustainability, fuel quality, OEM outreach and more. On Jan. 1, California implemented its state Low Carbon Fuel Standard with biodiesel from multiple feedstocks qualifying as a low carbon fuel solution. 

Biodiesel’s energy balance numbers improved from 4.5-to-1 in previous studies all the way up to 5.54-to-1 on increased efficiencies of farmers to produce raw materials and the biodiesel production process becoming more energy efficient.

Fuel quality continues to improve industry-wide as 80 percent of fuel produced in 2011 came from BQ-9000-registered producers. On the OEM side, Isuzu and Hino Trucks joined the ranks of other B20 supporters, and the Big Three U.S. automakers continued to show strong support.

The challenges of 2010 brought the industry together. 2011 was a record year as the industry shifted into its new role under the RFS2. 2012 is another promising year; we must continue to be focused on expanding our role as an advanced biofuel producer and remain committed to federal policy efforts. Stable policy creates significant opportunities to grow and expand our industry for long-term partnerships. We must remain united to showcase the green collar jobs we create, the environmental benefits we provide and our role in the nation’s energy complex.

Gary Haer, Chairman, National Biodiesel Board

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