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Biodiesel use shatters record

United Soybean Board biodiesel fuel pump
Domestic biodiesel production remains below available capacity, while imports increased by more than 50%.

The U.S. saw a record of almost 2.9 billion gal. of biodiesel and renewable diesel in 2016, outpacing the previous record by almost 40%. Also, for the first time ever, the monthly market topped 300 million gal., with December's numbers coming in at 362 million gal.

“We are proud to be delivering record gallons of American made biodiesel, but that success is undermined by the fact our members are losing more than a third of the market to foreign imports,” National Biodiesel Board chief executive officer Donnell Rehagen said.

According to numbers released last Thursday by the Environmental Protection Agency, the 2016 level of 2.9 billion gal. was an 800 million gal. increase from 2.1 billion gal. of biodiesel and renewable diesel produced in 2015. At the same time, domestic production rose from about 1.4 billion gal. in 2015 to more than 1.8 billion gal. in 2016, still well below available capacity. Imports increased by more than 50% from an estimated 670 million gal. in 2015 to more than 1 billion gal. in 2016, shortchanging potential economic benefits to U.S. producers.

“The market realities spotlight two important points. First, the RFS (Renewable Fuel Standard) is working to deliver energy choices to consumers and promote local economic activity. Second, reforming the biodiesel tax incentive as a domestic production credit remains critical to grow these programs in America's best interest,” Rehagen said.

According to a study conducted by LMC International, a 2.9 billion gal. biodiesel and renewable diesel market divided between domestic and foreign supply supports about 64,000 U.S. jobs and has $11.42 billion in total economic impact. Economic benefits increase substantially when domestic production grows rather than imports. For example, just 2.5 billion gal. of domestic production would support at least 81,600 U.S. jobs and $14.7 billion in total economic benefit.

“It's just common sense that our tax dollars should benefit American jobs and local companies instead of incentivizing imports,” Rehagen said.

The biomass-based diesel category under the RFS alone saw a record 2.6 billion gal. market, allowing the advanced biofuel program to reach more than 4 billion gal. of ethanol equivalent. These numbers exceeded EPA's estimates for 2016 and track with the Biodiesel Board's projections, showing that the industry can deliver on the goals set by Congress.

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