It looks like soybean-based biodiesel is returning to profitability.
This article from Biodiesel Magazine says the USDA-funded Agricultural Marketing Resource Center model shows that a hypothetical, soy biodiesel plant has reversed a six-month trend of losses and would now be operating in the black.
The overwhelming impact of soybean oil prices, which amount to close to 90 percent of the overall cost of biodiesel production, is shown in the comparison of September’s improving numbers with the poorest month, May 2009. The biodiesel revenue for that month was actually slightly higher than September at $3.10 per gallon. However, soy oil was 38 cents a gallon higher at $2.73 per gallon, natural gas remained the same at 3 cents per gallon and methanol cost was lower in May at 6 cents per gallon. AgMRC’s model plant showed a total breakeven cost per gallon, including variable and fixed costs of $3.32 for that low month of May 2009. The net return over variable costs was 4 cents per gallon in May and the net return over all costs was a negative 22 cents per gallon.
It should be noted that the model indicated negative net returns over all costs for the latter half of 2007 turning to positive in March of 2008 until March of 2009. During that year, biodiesel revenue started at $5.16 per gallon, peaked at $5.51 in June 2008 and dropped to $2.68 per gallon when the net return over all costs dropped into the red. EIA reports the spot diesel price at Chicago a year ago in October, 2008, was $2.85 cents per gallon.
The article adds that this model doesn’t tell the whole soy biodiesel story, admitting that a drop in petroleum prices has pushed regular diesel to prices significantly lower than biodiesel… if the $1 per gallon blenders tax credit is not taken off the price of a gallon of biodiesel. But the report does give hope that some of the pressure on the biodiesel industry is letting up.
You can read the report for yourself here.
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The is agreement with Value Prior to Pulping (VPP), an organization created by the Agenda 2020 Technology Alliance, a special project of the American Forest and Paper Association, and CleanTech Partners, Inc. VPP is funded by the U.S. Department of Energy (DOE), the State of Wisconsin and several large forest products companies.
A mix of electrically powered and biodiesel and E85 ethanol fueled vehicles lead the list for the Automotive X Prize.
Disneyland has picked up California’s highest and most prestigious environmental honor… thanks in part to biodiesel.
Ninety-five percent of those polled agreed that farmers are trusted messengers on issues such as agriculture, corn products and ethanol – and ethanol itself was supported or strongly supported as a good fuel alternative by 65 percent.
Rising feed prices for catfish farms and the rising Chinese market are bad news for those in the South, as more than 320,000 catfish pond acres could be up for grabs. But where one door closes, another opens, as a possible glut of open-air ponds could provide a boon for those looking to raise algae for biodiesel.
Last week, we told you new research shows how green biodiesel is. I finally got a chance to catch up with National Biodiesel Board CEO Joe Jobe to talk a little bit about this important study… and what it will mean as the Environmental Protection Agency considers a new Renewable Fuels Standard, RFS-2.
In this edition of the Domestic Fuel Cast, you’ll hear how Jobe believes the information that biodiesel now produces 4.5 units of energy for every unit of energy spent on it will prove to the EPA and skeptics that biodiesel is truly one of the greenest fuels out there. He says the information couldn’t come at a better time and was included with the NBB’s comments about the RFS-2.
Jobe adds that the NBB will be showing off biodiesel’s green, sustainable nature with a