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  • Paul Winters

Biobased Diesel Industry Provides Fuel for US Economy’s Engine



A new report details the important economic impacts biodiesel and renewable diesel have on the U.S. economy, particularly for farming, oilseed processing and fuel production.


The U.S. market for biodiesel and renewable diesel reached 3.1 billion gallons in 2021, generating $23.2 billion in economic activity and supporting 75,200 jobs, according to a new report released by Clean Fuels Alliance America. The study, “Economic Impact of Biodiesel on the U.S. Economy 2022,” was conducted for Clean Fuels by LMC International, and it evaluates direct, indirect and induced economic impacts and jobs across the entire value chain, from raw-material production, collection and processing to fuel production and distribution. The 75,200 jobs paid $3.6 billion in annual wages in the United States.


The study finds that biodiesel and renewable diesel production generate the largest economic and employment benefits in the sectors of farming, oilseed processing and fuel production. The farm sector benefits from 30 percent of the overall economic activity, or $7.41 billion. It also supports 28,236 U.S. jobs earning $1.36 billion in wages. The oilseed-processing industry benefits from more than 21 percent of the economic activity, or $4.97 billion. The biodiesel and renewable diesel market supports 6,024 U.S. jobs earning $380 million in wages in the sector. It also supports 14,661 jobs earning $560 million in wages in the waste-grease recycling and animal-fat rendering sectors.


Clean-fuel production supports $9.57 billion in economic activity—equal to 41 percent of the overall economic impact—and 17,120 U.S. jobs, earning $880 million in wages. For every 100-million-gallon increase in domestic clean-fuel production, the direct, indirect and induced economic activity increases by $1.09 billion and U.S. jobs grow by 3,185.


The data also demonstrates a substantial increase in overall economic activity associated with market growth for biodiesel, renewable diesel and sustainable aviation fuel (SAF) compared to a prior study in August 2019. That study calculated an overall economic impact of $17 billion and 65,600 jobs based on a U.S. market of 2.5 billion gallons. The 2019 study demonstrated an increase in economic activity of $780 million for every additional 100 million gallons in the market.


The biodiesel and renewable diesel industry is already growing steadily to meet demand for heavy-duty transportation and work vehicles as well as new markets like rail, marine and aviation fuels. According to data from U.S. EPA’s Renewable Fuel Standard program, the U.S. market for biodiesel and renewable diesel grew by 200 million gallons in both 2020 and 2021. That growth occurred during the pandemic, as other U.S. fuel manufacturers cut production. For the first half of 2022, the U.S. market for biodiesel and renewable diesel was already 400 million gallons larger than during the same period in 2021, according to EPA data.


Clean Fuels Alliance America envisions the industry doubling in size by 2030, with domestic production reaching 6 billion gallons annually. That growth can generate additional jobs and increasing economic opportunities for growers, fuel producers and other economic sectors.


The study calculates that producing 6 billion gallons of clean fuels in the United States would increase overall economic activity from the current $23.2 billion to $61.6 billion and support 187,003 jobs earning $8.8 billion in wages. The construction of additional capacity would increase economic activity by an added $4.3 billion and support an additional 144,500 related temporary jobs earning $5.8 billion in wages.


The envisioned growth is aggressive but achievable, based on existing investments in oilseed processing, fuel production and infrastructure.


The crushing industry has existing operable capacity to process nearly 2.2 billion bushels of soybeans annually, according to the American Soybean Association. Overall, the industry is investing more than $4 billion in additional oilseed-processing capacity. The existing facilities are scheduled to expand capacity by an additional 255 million bushels. An additional 494 million bushels of new capacity is planned over the next several years. Combined, the expansions and new capacity could support growth of an additional billion gallons of biodiesel and renewable diesel.


Infrastructure to provide clean fuels to consumers is also attracting new investment. The USDA’s Higher Blends Infrastructure Incentive Program provided more than $25 million in matching grants to infrastructure projects for storage and dispensing that will support 1 billion gallons of biodiesel, making it more accessible to consumers. USDA is taking proposals on another round of grants for 2023. And the agency is planning a follow-on grant program—the Biofuel Infrastructure and Agricultural Market Expansion Program—with funding authorized by Congress through 2030.


The industry’s vision for rapid growth through this decade is within reach. It has the potential to bring economic opportunities to many states and rural communities across the country, where the industry has strong roots.




Author: Paul Winters

Director of Public Affairs and Federal Communications

Clean Fuels Alliance America

202-737-8803

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