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OBSTACLES AHEAD Recipes for growth or stagnancy of biodiesel industry linger in 2019 BY KATIE JOHNSON
T
he biodiesel industry sits at a precipice, awaiting progress on several longtime policy obstacles impeding growth in industry production. “We’re on a teeter-totter,” says Grant Kimberley, executive director of the Iowa Biodiesel Board. “It could go either way this year.” Nearly 30 years ago, biodiesel entered the market that has evolved into a 2 billion-gallons-per-year industry. The National Biodiesel Board reports that Iowa produced a nationleading 285 million gallons in 2017. Estimates for 2018 show that amount has grown to more than 350 million gallons. The U.S. Department of Agriculture projects growth will continue, with 7.8 billion pounds of soybean oil to be used for biodiesel in 2019 – 13 percent
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more than 2018 — making it the second largest use of soybean oil behind food. Despite the industry’s booming growth, biodiesel production continues to face several roadblocks that repressed further production in 2018. They include the blenders tax credit, Renewable Fuels Standard (RFS) and small refinery waivers. “Uncertainty lies ahead with the on-and-off-again nature of the biodiesel tax credit,” Kimberley says. “Since 2005, the blenders tax credit has been a foundation of the biodiesel industry and is necessary for continued stability and growth opportunities.” He emphasized that biodiesel plants are stagnant in growth without longterm market assurance. “There is no way to plan long term without knowing whether the tax credit
will be in place,” Kimberley says. Facilities can operate for a while, but they need money to continue and improve, he says. If the tax credit gets reinstated, especially for several years, plants can make investment decisions to become more efficient and improve logistics and infrastructure to be stronger down the road. Western Iowa Energy, located in Wall Lake, chose to diversify their plant, in part, through kosher certification. Brad Wilson, Western Iowa Energy president and general manager, says certifying their facility as kosher improved demand, value and their bottom line. The facility can produce 45 million gallons of biodiesel per year since focusing on soybean oil as a primary ingredient in their biodiesel. Despite the added diversification,
