http://unitedsoybean.org/article/golden-opportunity-for-biodiesel/
Golden Opportunity for Biodiesel
Posted on March 17, 2016
California biodiesel spikes as major part of carbon-cutting solution
California’s new carbon-reduction policy has made the state a new target
market for biodiesel producers. U.S. soybean farmers, who sustainably
produce the soybean oil used to make much of that biodiesel, are also
taking notice.
Biodiesel’s ability to reduce carbon emissions – and the subsequent
market opportunity that comes with it – were reoccurring messages at the
recent National Biodiesel Conference and Expo. As a result, attendees
heard how the fuel is becoming a darling for diesel users in the Golden
State.
“The one overriding message I’ve taken away from this conference is
carbon,” says Matthew Stone, who, for the past 10 years, has been
monitoring the global biodiesel marketplace for biofuels-analytics firm
Prima. “The markets for carbon reduction in biofuels have grown. There’s
no escaping it – carbon [reduction] is the way to go, and the industry
would do well to adopt it.”
Biodiesel producers stand to make generous premiums from California’s
Low-Carbon Fuel Standard (LCFS) and from similar requirements in other
states and Canada.
The LCFS has some in the industry already changing their mindset, says
National Biodiesel Board (NBB) Director of State Regulatory Affairs
Shelby Neal.
“We are in the business of providing carbon reductions; carbon
reductions are our product,” he explains. “To ignore that fact is to
miss significant business opportunities. The LCFS holds the potential
for a lot of additional revenue for biodiesel producers.”
The LCFS requires a 10 percent cut in statewide greenhouse-gas emissions
by 2020, and biodiesel is providing more than its fair share of those
cuts. Neal points out that diesel fuel makes up 20 percent of the fuel
used in California, but biodiesel is providing 39 percent of the carbon
reduction required by the LCFS.
That’s because biodiesel made from U.S. soybean oil has a
carbon-intensity (CI) value of about half that of ultra-low-sulfur
diesel (ULSD) – 51.83 for soy biodiesel compared with 102.76 for ULSD.
Part of biodiesel’s excellent carbon-reduction story is being written on
U.S. soybean farms, says Robert Stobaugh, a soy checkoff farmer-leader
and NBB Governing Board member.
“The more sustainable we are as farmers, the more sustainable our
products will be for our end users,” says Stobaugh, who farms in Atkins,
Arkansas. “With biodiesel and government requirements for carbon
reductions, we’re already seeing how our sustainability is leading to
additional markets for our products and more value for us.”
According to Neal, once California meets its 10 percent goal in 2020,
the cuts could get even steeper, making the market even bigger for
biodiesel producers.
“People have realized that California’s scheme is not a flash in the
pan,” Stone says. “It’s here to stay.”
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