Biodiesel Poised to Have an Explosive Year
The mood was optimistic during Advance: 2011 Biodiesel Conference & Expo last week. Why? Because all signs are pointing to the industry growing by leaps and bounds this year. I spoke with Donald Nelson, Director, National Sales with REG (Renewable Energy Group), the largest biodiesel company in the U.S. about RINS and how, if at all, they can signal positive things in the marketplace.
To begin, I asked Nelson to explain what a RIN was. It’s a Renewable Identification Number (RIN). “To make it simple,” said Nelson, “RINS really is the currency of the RFS2. That’s how the EPA measures the compliance of an obligated party.” He continued by explaining that for each gallon of biodiesel produced, 1.5 RINs are generated that travel with that gallon to the blender and then the blender or obligated party separate that RIN from the “wet gallon” and at this point, the RIN can travel separately from the fuel.
Last year was a tough year for the biodiesel industry. The $1 per gallon tax credit had expired and several obligated parties sued the EPA over the RFS2 biodiesel mandate numbers (under the RFS2 biodiesel qualifies as biomass based diesel). Fortunately, by the end of the year, the EPA won the suit and the credit came back, but by this time there weren’t enough RINS in the marketplace to meet demand to the uncertainty caused by the aforementioned issues.
Nelson said there were 1.15 billion gallons of material that needed to be consumed when you add 2009 and 2010 together but it appears that the marketplace will be short 95 million gallons. Yet he’s not worried and is very confident that the industry can not only make up for the shortfall this year, but also meet the RFS2 numbers. Combined this will be a total of approximately 925 million gallons of biodiesel needed to be produced this year. To put it in perspective, last year the industry produced 310 million gallons. Nelson said this is a 300 percent increase in production but there are 2.2 billion gallons of biodiesel production registered with the EPA, although much of it is not online.
So what’s next for the industry? Explosive growth. Plants are coming back online although Nelson said some still need additional investment dollars to get back up and running. In addition, the obligated parties are creating plans to build out the much needed infrastructure so the fuel can get where it needs to go.
Nelson concluded that he thinks the industry is going to see tremendous growth over the next couple of years and “It’s very exciting.”
You can listen to my full interview with Don here: Interview with REG's Donald Nelson
2011 National Biodiesel Conference Photo Album
4 Comments
Dick
The biodiesel industry is still at a stand still. Instead of requiring a percentage of biodiesel to be blended based on the amount of petroleum being sold, the companies only have to blend so much a year. What will happen is that at the end of the year the oil companies will order all the biodiesel they are supposed to, and no one will be able to produce that much in a short amount of time.
Then they will just tell the EPA, that we tried, and no one came through. The EPA needs to wise up, and require a percentage of production of diesel to be blended with biodiesel, or so much biodiesel to be blended per month, or quarter, and not let the oil companies wait til the end of the year to blend there requirement. BIG OIL WINS AGAIN.
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Jatrophaworld
Agriculture is the dominant water user, consuming more than 70% of total global water demand.Industrially produced meat is especially waterintensive, requiring up to 20,000 litres of water to produce a kilogram, compared to approximately 1,200 litres to produce a kilogram of grain. Both population growth and increasing meat consumption in emerging economies will therefore have a tremendous impact on resource needs. over the next 10 years, the world population is expected to rise from the current 6.83 billion to approximately 7.7 billion, with most of the growth in emerging economies. The United Nations Food and Agriculture Organization (FAO) projects a 50% increase in demand for food by 2030, and the International Food Policy Research Instituted (IFRI) expects a 30% increase in demand for water, with other estimates rising to over 40%. The International Energy Agency (IEA) forecasts that the world economy will demand at least 40% more energy by 2030; producing this energy will draw heavily on freshwater resources. For such increased demand for water, food and energy to be realized, significant and perhaps radical changes in water use will be required as well as new sources for food and energy production exploited. For food production, supply-related challenges may limit the ability of farmers to meet growth in demand. Already, major grain-producing areas – in China, India and the United States, for example – depend on unsustainable mining of groundwater. In some regions, such as North Africa and Australia, climate-related changes of precipitation have already critically reduced the levels of freshwater supply. In northeast China, one of the country’s main grain-producing regions, climate change could increase drought losses by over 50% by 2030.10 Climate change is likely to be exacerbated by meeting the growing demand for energy. Over 75% of the global increase in energy use from 2007-2030 is expected to be met through fossil fuels, especially coal, and an estimated 77% of the power stations required to meet demand are yet to be built. In this context most importantly, focusing on the critical Connections between Water-Food-Energy-Climate is required to be considered and decision-makers will have to inspire all to engage collectively in efforts to improve the global system’s overall resilience. The need of hour is to grow food crop for food, Conserve the forest and pasture land and Grow Fuel crops on no arable land We at CJP are engaged in development and research of nonfood Oil crops which grow on wasteland some of them are Castor, Moringa, Pongamia, Simarouba, Jojoba, Jatropha, algae etc. We provide a platform for all stakeholders to collaborate in shaping a more secure, innovative and resilient future. Our next 4th JatrophaWorld 2011 from September 14-18, 2011 is the best place to be educated about Promising and sustainable biodiesel crops and technology for more kindly visit our site http://www.jatrophabiodiesel.
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