Biodiesel Bouncing Back with Help from RFS & REG

John Davis

After having a couple of tough years, biodiesel could be poised for a bounce back … even if the $1-a-gallon federal tax credit is not renewed.

This article from Biofuels Digest says another federal program, the Renewable Fuels Standard, and technology from Iowa-based Renewable Energy Group are contributing to a revival of the biodiesel industry in the U.S.:

Optimism began to return this year when the EPA finally issued rules for the revised Renewable Fuel Standard, which called for a rapid expansion in biodiesel blending, and also qualified biodiesel as an advanced biofuel, since it easily satisfied the 50 percent emissions improvement required under RFS2.

Something most interesting happened this year with the RFS. The EPA waived down the cellulosic ethanol mandate when it was cleat that production capacity was not availability. But the standard as a whole was not waived down, and a main reason was the availability of biodiesel to fill the gap.

Not every gallon can come back. Estimates range from 750 million to 1.5 billion gallons in terms of the actual potential to revive production capacity in the US. With the delays in cellulosic ethanol, there is the chance that even more production capacity from biodiesel will be called for as the RFS bites deeper and deeper into the US fuel supply over the next ten years.

The article goes on to talk about how REG has been buying up idled biodiesel plants, building up the company’s capacity. In addition, REG has been using high FFA stripping technology, which allows the company to take in low-cost, high-volume feedstocks that are usually tough to convert into biodiesel because of the trouble stripping out the free fatty acids (FFA) that are the root of the problem. The oils from this process are homogenized and turned into biodiesel.

In addition, the EPA says as long as there is sufficient biodiesel production capacity in the country, the overall RFS mandate will stay in place, even if cellulosic ethanol or other advanced biofuels have trouble getting financing and getting off the ground.