Demand for Glycerin to Keep Pace with Supply

John Davis

As the production of biodiesel is expected to grow with (finally!) the renewal of the federal $1-a-gallon tax credit and the new Renewable Fuels Standard requiring 800 million gallons of biomass-based diesel to be blended this year is implemented, the amount of glycerin is expected to also climb, possibly flooding the market.

But this article from Biodiesel Magazine says many new applications for the biodiesel by-product could help alleviate that surplus:

One of those areas being considered in particular is glycerin’s use as a potentially feasible feedstuff for swine. According to a study led by University of Illinois graduate research assistant Omarh Mendoza, diets for growing-finishing pigs may include up to 15 percent glycerin and achieve similar performance compared to conventional corn/soybean meal diets. The research was published in the Journal of Animal Science…

As more biodiesel plants are expected to come online this year, many will be open to finding new markets and uses for their glycerin. One of them, Ames, Iowa-based biodiesel producer and marketer Renewable Energy Group Inc., is expected to be a leading supplier of glycerin into the market. According to Dave Elsenbast, vice president of supply chain at REG, the company predicts glycerin production volumes will ramp up as new applications of the product rise.

“We think there will be more supply in 2011 as the biodiesel industry gets ramped up for RFS2,” Elsenbast said. “But, we think that there’s going to be a lot of continued new demands that hit the glycerin market that will be a good off-take for these additional supplied as they come on.”

REG, which owns a network of five operating biodiesel plants with the capacity to produce more than 160 million pounds of glycerin annually, predicts more than 700 million pounds of glycerin is expected to hit the market in 2011. That’s a near 59 percent spike in glycerin supply compared to the 427 million pounds of crude glycerin produced in 2009.

Elsenbast also noted that supply and demand will have the biggest impact on crude glycerin prices.