According to this article from the Atlanta journal constitution, soybean prices have more than doubled while the demand for biodiesel has not materialized like expected. We give our producers a dollar a gallon tax break on biodiesel, and most of it is getting shipped overseas where not so surprisingly more environmentally conscious Europeans buy most of it. We’re subsidizing Europe’s eco movement where here back home we are still buying oil from overseas…a great deal of it from people who despise us.
Local soy based biodiesel producers are now finding themselves with the prospect of having to import soybean oil and possibly convert to imported palm oil from overseas due to the rising cost of soybeans; in part due to the ethanol mandate which encourages farmers to convert land previously used for soybean production into corn for ethanol.
It’s critical that if the biodiesel industry is to survive long enough to make a real difference then we need requirements of a minimal amount of biodiesel blended into all diesel sold. Rather than raising cigarette taxes we could use tax incentives for tobacco farmers to convert farmlands formerly used for growing a product that does a measurable harm to the community to grow canola for use in bio-fuels. And we need to advance the recently perfected processes for converting waste chicken products to fuels and give our floundering biodiesel facilities an alternative to creating a new dependence on a new foreign market. I’m not anti globalization by any means but some things are best kept in house.
Wayne Johnson, a biodiesel producer in Georgia cited in this article says:
The American public, with rare exception, is 100 percent price-sensitive,” Johnson said. “They will not pay a penny more to go green.
This is disappointing but unfortunately true. When I tell people I run biodiesel in my car the first question out of everyone is “how much money are you saving per gallon?”
When I tell them I actually pay more per gallon some days they are blown away. But look at how many people complain about the damage big chain stores do to local owned business; only to go to those same stores when it’s time to do their shopping because the deals are so good.
{ 2 comments… read them below or add one }
dear WJ, biodiesel is a subsidy game, without govt support i’m afraid it may not meet the green sayer’s objective. any business has to be profit/benefit orientated. the current high price of feedstock and high manufacturing cost also not practical for consumer to switch over to green fuel/more expensive fuel. most tropical oils feedstock biodiesel producers are currently closed due to high cost and low biodiesel price worldwide. without govt handout the game is over. regards.igor.
igor,
while this is true in the short run, it doesn’t have to be. there is farmland that is not being used for much of anything, and like anything we are experiencing growing pains. eventually biodiesel should reach a point of profitablilty. Far from game over, it’s a temporary setback.