Biodiesel: good for consumer, economy
Brigette Harlan is GROWMARK’s renewable fuels product manager
Posted on: 7/28/2011 4:26:00 PM
If you buy fuel and regularly watch energy prices these days, you may feel like you’re riding a roller coaster. You may experience anxiety as prices head upward and relief as they come back down.
While watching energy prices may not be quite as exciting as actually riding a roller coaster, it can be helpful to better understand the factors that affect the price of fuel.
Because of advantageous biodiesel blending economics, most diesel fuel sold in Illinois today is actually a biodiesel blend.
Depending upon the price of feedstocks used to make the biodiesel, the relative price of diesel fuel, and the incentives offered by the federal and/or state governments, the savings to make biodiesel blends can be substantial.
On biodiesel blends above 10 percent, the State of Illinois offers sales tax abatement effective through 2013. Depending upon local tax rates, there is a minimum 6.25 percent savings to the consumer. Couple that with the federal government’s $1-per- gallon blending credit on biodiesel gallons blended into diesel fuel and the savings become considerable.
Further, if we factor in the current high price of oil and the value captured from a Renewable Identification Number (RIN), the savings become even more significant.
In recent months, B11 blends (89 percent diesel fuel, 11 percent biodiesel) sold in Illinois have consistently cost 20 cents or more per gallon less than straight diesel fuel.
This past June, the National Biodiesel Board released a study, conducted by a consulting firm specializing in environmental and natural resource economics, that focused on the economic benefits that the biodiesel industry has on the country’s economy.
The study estimates that in the year 2011 the biodiesel industry will support more than 30,000 jobs resulting in nearly $1.7 billion of family income. It will also add more than $3 billion to the nation’s gross domestic product (GDP).
In 2015, assuming continued government support at current levels and production increases to meet the Environmental Protection Agency’s Renewable Fuel Standard (RFS2), it is estimated that the biodiesel industry will support nearly 75,000 jobs resulting in more than $4 billion of family income. It will also add $7.3 billion to the GDP.
Not only are biodiesel blends economical for users, but they create jobs and provide an economic stimulus to our nation’s economy.
For additional information and assistance in determining blending economics for your business, contact your FS energy salesperson.
Brigette Harlan is GROWMARK’s renewable fuels product manager. Her e-mail address is firstname.lastname@example.org.