Biodiesel, Renewable Diesel Industries’ Vision Sees Hope Amongst COVID-19

April 8, 2020 |

By Donnell Rehagen, Chief Executive Officer, National Biodiesel Board

Special to The Digest

Before the COVID-19 pandemic became the primary focus of our industry, and the world, the National Biodiesel Board and our industry leadership spent much of 2019 assessing our longer-term future. Once our nation gets through the current uncertainty that is ahead of us in the near term, I believe the future of biodiesel and renewable diesel in America is extremely bright.

With a coordinated effort, collective voice, and countless hours of hard work, NBB released a new Vision for the industry in January 2020. Our association undertook a formal strategic planning process to ask the tough questions, define the challenges, and lay out a roadmap to achieving those objectives over the next few years. It is critical that any industry have a clear and complete vision of what it wants to accomplish. Today, our industry’s vision of the future is clearer, sharper, and full of opportunity:

Biodiesel, renewable diesel, and renewable jet fuel will be recognized as mainstream low-carbon fuel options with superior performance and emission characteristics. In on road, off road, air transportation, electricity generation, and home heating applications, use will exceed six billion gallons by 2030, eliminating over 35 million metric tons of CO2 equivalent greenhouse gas emissions annually. With advancements in feedstock, use will reach 15 billion gallons by 2050.

As carbon policies around the country really begin to take hold, we see tremendous opportunities for growth of low-carbon fuels like biodiesel, renewable diesel, and renewable jet fuel. While the volumes we envision may seem ambitious, the foundation we have built as an industry to this point makes them attainable.

Through intense research and more than a year’s-worth of discussions with industry experts, we found there will be several key trends in the next ten years that will help us reach our lofty goals. Key driving factors pushing us towards six billion gallons as an industry by 2030 include societal pushes for reduced emissions; new technology; shifts in the petroleum sector; and the ability to meet carbon reduction goals with biomass-based diesel fuels as the lowest-cost option in the market.

Our future growth is not based on one single market, but a combination of everything our industry has in its arsenal. Think of the federal Renewable Fuel Standard as our foundation, it’s in place to support us. But we also have a lot of demand coming from other places for future growth that we must build on. The oilheat industry is fully committed to reducing carbon emissions in their own supply chain, helping to drive demand with the recent Providence Resolution committed to achieving net-zero emission by 2050. And, we see an immense growing demand opportunity for renewable jet fuel. As emission standards and reduction goals become more prominent for the aviation industry, they will look to us for new solutions.

We also have state programs and incentives that have driven growing demand for years. We continue to see aggressive carbon policies coming out of various states, regions and even municipalities in the country that help set the stage for monumental industry growth. This demand, driven by carbon policy, is expected to be a least 3.6 billion gallons by 2030.

However, we can’t forget about those who produce the feedstocks we need to meet this national demand. Our existing feedstock base will play a critical role. We expect this robust demand for biodiesel will send positive market signals and stimulate greater investment in technology and feedstock advances. Also, the continued growing demand for animal protein, driven by worldwide population growth, will lead to increased fats and oils in the market available for industrial uses. The U.S. market demand for protein is growing at a faster rate than vegetable oil market demand, resulting in a projected annual excess of 6 billion pounds of soybean oil by 2030.

Low carbon is clearly the way of the future. Under our association’s new Vision and continued work we can make massive strides in carbon reduction. Six billion gallons of biomass-based diesel will reduce 35 million metric tons of carbon dioxide; 15 billion gallons will reduce 85 million metric tons. More specifically, these millions of metric tons are equal to removing 7.5 million and 18 million (respectively) cars from the road for a year. We feel confident we are on the cutting edge of a fundamental shift in how consumers look at their fuel for transportation and home heating.

However, we can’t reach these goals alone. Long-term, our sights are set on doing everything we can to better and protect this valuable industry. We need all our industry partners to see and share our vision. Together with farmers, feedstock producers, heating oil dealers, fuel distributors, and everyone throughout the supply chain, this industry is stronger and together we can reach 6 billion gallons by 2030 — and beyond.

We are committed to the industry. We are committed to each and every one of our members. And, we are committed to the hard work it will take to get us there.

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