Following the Future of Biodiesel

John Davis

FutureFuel1An analysis of where the biodiesel industry is headed is optimistic. Of course, the report comes from a company intimately involved in the green fuel.

This article posted on from biodiesel producer FutureFuel Corp. looks at where some of the best prospects for biodiesel are – in particular how biodiesel demand is projected to grow, the biodiesel supply appears limited, and the robust economics and public support biodiesel enjoys:

The Renewable Fuel Standard (“RFS”) … helped the biodiesel industry reach production levels of nearly 1.1 billion gallons per year over the past two years, exceeding the programs requirements.

Between 2008 and 2022, the Energy Independence and Security Act of 2007 increased the volume of renewable fuel required to be blended into transportation fuel from 9 billion gallons to 36 billion gallons. These metrics help ensure that demand for biodiesel fuel will continue to rise over the coming years and create significant opportunities for biodiesel producers and affiliate companies to generate strong top-line revenues moving forward…

Biodiesel demand may be on the rise, but the supply side was hit by the RIN crisis that impacted the market…

[T]he Energy Information Administration (“EIA”) [says] it’s clear that biodiesel production fell sharply during the second half of 2012, compared to 2011, but has been recovering so far in 2013 to record levels…

The third key factor for investors to consider beyond supply and demand is public support and cost economics, since the industry’s growth does demand on government subsidies. Fortunately, it has become clear that the biodiesel industry offers a number of enormous economic benefits, environmental benefits, and public benefits worth considering. These benefits … suggest that support for the industry remains robust.

Interesting read. Check it out!