energy.agwired.com

Recently, we told you about how the amount of biomass-based diesel imports had jumped dramatically. Part of the reason for the jump in imports was seen as Argentina and Indonesia being shut out of selling their biodiesel to the European Union, due to a trade dispute.

While some people might be concerned that importing biodiesel would hurt the domestic market here, our friend Ron Kotrba from Biodiesel Magazine writes that it might not be a problem. He says that March’s 17.3 million gallons imported, with about half of that from Argentina and Indonesia, is up sharply from only 2.2 million gallons in February, and it could be only the beginning as 21 million gallons a month could come this summer. But he says even with a possible 250 million gallons of biodiesel imported, it’s still not necessarily a problem:

There is enough room in the advanced biofuel pool under RFS2 in 2013, including the nestled biomass-based diesel carve-out, for 1.83 billion gallons (at 2.75 billion ethanol-equivalent RINs). If the annualized peak import figures were subtracted from this, it would leave room for more than 1.5 billion gallons of U.S.-produced biomass-based diesel—the biomass-based diesel carve-out for this year sits at 1.28 billion gallons. As the advanced biofuel pool grows, as designed in the statute, the advanced biofuel pool could reach 5.5 billion gallons in 2015. Even if Argentina were to dump a half a billion gallons of product into U.S. ports, there would be more than enough room in advanced biofuel mandate growth—and hopefully in the biomass-based diesel carve-out increases in years to come—to allow the U.S. biodiesel industry to prosper and expand as much as it desires. The NBB has done a good job so far proving to EPA that increasing the biodiesel carve-out is the right thing to do. Also, if domestic producers want to import palm feedstock or biodiesel and generate D6 conventional RINs, that leaves more room for D4 and D5 RIN generation. At the same time, concerns over imports can provide stimulus to incentivize low-cost domestic production, and this requires investment in the U.S. biodiesel complex. As producers cash in on the retro tax credit through the end of this year, and as the economy recovers, I anticipate investment dollars should start flowing into the industry again. In fact, we are already seeing heightened construction and expansion activity in the domestic sector.

Kotrba goes on to point out there have been several very positive biodiesel developments in the past month, so perhaps the sky isn’t falling after all, and biodiesel producers can do their best Bobby McFerrin – Don’t Worry, Be Happy!