Tough Times for Soy-based Biodiesel

John Davis

In the past couple of years, soybean growers have seen prices for their feedstock skyrocket as oil prices rose as well and motorists looked for alternatives to petroleum-based fuels. But those rising prices for soybeans put a lot of refineries in jeopardy, despite the growing demand for biodiesel.

Add to those issues, a new proposal from the Environmental Protection Agency that would basically shut out soy-based biodiesel from the Renewable Energy Standard, it’s no wonder Iowa Farmer Today has this story on how biodiesel and soybeans could be in for some tough times ahead:

“The biodiesel industry is hurting right now,” says Solon farmer Ed Ulch, treasurer of the National Biodiesel Board and a member of the Iowa Soybean Association board.

That sentiment is echoed by Jon Scharingson, director of marketing for REG (The Renewable Energy Group), which operates the plant in Newton.

“The last two years have been tough on the industry,” Scharingson says.

He explains soybean prices rose, oil prices fell and several federal governmental issues appeared on the horizon during that time. The combination spelled bad news for biodiesel.

Today, many biodiesel plants are shut down. Others run periodically or at less than 100 percent of capacity.

The second important issue in Washington, D.C., is big. It involves the 2007 energy bill and the language regarding “indirect land use.”

The Environmental Protection Agency (EPA) issued a proposed rule in late May and put that proposal up for comment until late July…

Without soy oil, the United States will not be able to meet renewable fuel goals. There simply isn’t enough animal fat and substitute oils available to meet the levels of production included in those goals.

The article concludes by saying biodiesel producers, large and small, active and idle alike, are just waiting for the change that will put them back on top of the game.