Biodiesel And The Role Of Soy

I’ve said before that the food versus fuel debate is about more than corn, and specifically that using a large share of America’s vegetable oil for fuel would be counterproductive, and would do more to expand unsustainable palm oil production than to sustainably cut oil use and reduce carbon emissions.

Unfortunately, a perfect storm of poor policy choices led soy biodiesel production to increase by two thirds in 2013, which represents about 35 percent of the soybean oil produced in the U.S. Now the EPA has decided to take a breather for 2014 and 2015, which makes good sense.

Biodiesel is made from all sorts of different sources, ranging from used cooking oil — which converts a waste into a valuable fuel — to food-grade vegetable oil — which turns valuable food into less valuable fuel. Unfortunately, despite encouraging growth in the production of waste-based biodiesel, the majority of the expansion is coming from soybean oil — causing the problems detailed in the infographic below and which, as I explained in April, does more to drive palm oil expansion and deforestation in Southeast Asia than increase planting of soybeans in the U.S.

BD Infographic

In 2013 we called on the EPA to use its authority to ensure that blending constraints for ethanol and delays in the cellulosic biofuel scale up did not lead to biodiesel volumes increasing beyond what was sustainable. Under the Renewable Fuel Standard (RFS), other advanced biofuels (currently sugarcane ethanol from Brazil and biodiesel are the main options) can be used to meet the shortfall in cellulosic production. (You can check out our fact sheet on the complex mandate structure here.)

Unfortunately, the EPA did not take our advice, and, unable to meet the ethanol targets because of the lack of blending infrastructure, obligated parties (that is to say oil companies) turned to biodiesel instead to meet the standards. This phenomenon was amplified by the $1/gallon tax credit for biodiesel, which made blending biodiesel even more attractive (i.e. cheaper). All of this led to biodiesel use growing from a billion gallons in 2012 to projected total of 1.7  billion gallons in 2013, with the majority coming from soy biodiesel, which appears likely to have grown about 67 percent to about 900 million gallons.

900 million gallons of soy biodiesel may not seem like much compared to the 13 billion gallons of corn ethanol produced this year, but the vegetable oil market is much smaller than the corn market, so a smaller amount of vegetable oil-based biofuel can make a big difference. The 900 million gallons of soy biodiesel projected for this year would consume about 35 percent of U.S. soy oil production for the 2013/2014 marketing year. This is up from about 20 percent the previous two years, and less than 10 percent before that. This rapidly escalating share is reminiscent of the escalation of corn used for ethanol (now about 40 percent), and is the reason I have been saying all year that the food versus fuel fight is about much more than just corn.

BD Blog Image 2Soybean oil trends. 2013 data based on projection (details below)

Non-food biodiesel: good, but limited

As I mentioned, there are “good” sources of biodiesel that come from true waste products — but the scale of policy-driven demand for biodiesel is outstripping the low-carbon resources. Let’s look at the trends over the last few years:

BD Blog V2U.S. biodiesel feedstock trends. 2013 data based on projection (details below)

I’ve organized the categories roughly from the lowest carbon waste-based biofuels on the left to the more troublesome food-based fuels on the right. It’s encouraging to see healthy growth from the low-carbon end of the spectrum — recycled oils are up almost 70 percent and corn oil, primarily inedible oil recovered from ethanol production, has doubled. But as you can see, most of the growth continues to come from soy biodiesel and other vegetable oils.

EPA breather is a wise move

In their recent proposed rule, the EPA has proposed to hold the biodiesel mandate at 1.28 billion gallons for 2014 and 2015. Since the low-carbon fats and oils, indeed everything aside from edible vegetable oil, still accounts for less than 600 million gallons, that leaves plenty of room for these sources to continue to grow. And the nested structure of the RFS means biodiesel has the opportunity to grow by competing with other advanced biofuels in the rest of the advanced mandate. Using this approach instead of raising the biodiesel-specific mandate allows flexibility for the biodiesel market to grow further if circumstances warrant. I think the EPA would be smart to stick with this proposal, and reject calls to use the exceptional circumstances of 2013 to set a floor for biodiesel production going forward.

A note on the graphs: the numbers are estimates at this point. The Energy Information Administration publishes monthly reports on biodiesel production, but I had to do some extrapolation because the breakdowns have only been published through October. What I did was assume the breakdown of sources for the full year would match the average results for January through October, but that the totals would scale up to meet the 1.7 billion gallons that is being projected for 2013. I got the soy oil production statistics from the Foreign Agricultural Service of the U.S. Department of Agriculture. It takes 7.5 pounds of vegetable oil to make a gallon of biodiesel.

union-scientistsEditor’s Note: EarthTechling is proud to repost this article courtesy of Union of Concerned Scientists. Author credit goes to Jeremy Martin.

The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.

    • dscott@biodiesel.org

      The most rapid growth in advanced biofuels is the development of biodiesel from new and waste feedstocks. The federal Renewable Fuel Standard (RFS) is driving these positive developments. Faulty math in Jeremy’s blog betrays the positive impact of the RFS.

      According to EIA data ( http://www.eia.gov/biofuels/biodiesel/production/ ), soybean oil use for biodiesel increased by 23% in 2013-not the 67% claimed by his blog. Jeremy’s error was in extrapolating the actual EIA data over several hundred million gallons of renewable diesel made from animal fats and waste grease-not soy.

      The biodiesel story is about way more than just soy. The use of canola oil for biodiesel actually dropped 35%. Adding soy and canola, the total use of vegetable oil for biodiesel only increased by 14% in 2013. At the same time, biodiesel and renewable diesel produced from waste materials grew by 88%.

      Together, diverse feedstocks such as used cooking oil, animal fats, and waste greases are growing much faster than biodiesel produced from soybean oil. All of these forms of biodiesel and renewable diesel combine to displace a significant amount of fossil fuel. The average GHG reduction from
      this diverse mix of feedstocks is 81% better than petroleum. That includes comprehensive analysis of the indirect impacts and emissions from land use change described by Jeremy’s infographic. EPA has made sure than any
      biomass-based diesel eligible for the program meets a minimum 50% GHG reduction including indirect impacts from international land use change.

      The infographic suggests an interesting theory, but we are nowhere near triggering those indirect effects. Today, soybean oil is trading at $.37 lb. One year ago, it was $.50/lb. That is a 25% decrease in the price of vegetable oil. It is pretty hard to argue that biodiesel is causing more palm oil production if the price of veg oil is dropping. Biodiesel has been able to use more soybean oil, because consumers have decreased consumption of partially hydrogenated oil containing trans fats ( http://www.fda.gov/newsevents/newsroom/pressannouncements/ucm373939.htm ) by 75% since 2003. While food consumption of soybean oil has dropped, domestic production of soybean oil as a co-product of producing protein meal for livestock feed has remained strong.

      Another misleading statistic in Jeremy’s blog is the ratio of soybean oil used for biodiesel. His statistic neglects that nearly half of US soybeans are exported as whole beans. Most US soybean oil reaches foreign shores in whole beans. When soybeans are crushed in major importing countries, like China, they get 80% protein meal and 20% oil- just we do from beans that are crushed domestically. While we annually produce something over 8 million metric tons of soybean oil domestically, an equal amount of soybean oil remains in the whole beans that are exported or fed to livestock as whole beans. We are not using 35% of all this oil.

      The real numbers show that the Renewable Fuel Standard is promoting positive change in the displacement of diesel fuel. Unfortunately, the EPA is caving to pressure from oil companies to take a step backward from these advances in renewable fuels. We need the Union of Concerned Scientists and environmentalists everywhere to remind EPA that we still care about environmental impacts. Those concerns carry more weight when they are based on accurate data.

      Don Scott,
      Director of Sustainability
      National Biodiesel Board