Biodiesel market in US to more than double by 2015 - study
The US biodiesel industry will grow to support more than 74,000 jobs throughout the economy by 2015 while creating some $4 billion in household income, more than doubling current levels, according to an economic study released Tuesday by the National Biodiesel Board (NBB).
The report also found that the industry will grow to generate nearly $1.6 billion in local, state and federal tax revenues in 2015.
“This shows without question that a healthy and thriving biodiesel industry is good for America,” said Joe Jobe, CEO of NBB, the industry’s trade association.
“Biodiesel isn’t just improving our environment and shoring up our energy security, it’s creating good-paying jobs in virtually every state in the country,” he added.
The study, conducted by Cardno ENTRIX, an international consulting firm that specializes in environment and natural resources economics, documents the difficulties the industry faced when Congress allowed a key tax incentive to expire in 2010.
It found that the expiration of the tax credit and the accompanying 42% drop in production resulted in the loss of nearly 8,900 jobs, a drop in household income of $485 million, and a reduction in real GDP of $879 million.
But the industry is seeing a sharp turnaround in 2011 with the tax credit reinstated and the supporting regulatory framework of the EPA’s 2010 Renewable Fuel Standard, which designated biodiesel as an advanced biofuel.
Production jumped 69% in January and has been steadily climbing since. The study predicts the industry will support more than 31,000 jobs in 2011, generate income of nearly $1.7 billion to be circulated throughout the economy, and create more than $3 billion in GDP.
Under projected expansion by 2015, that economic impact would grow even further to supporting more than 74,000 jobs, $4 billion in income, and some $7.3 billion in GDP
“At a time when the federal government is looking for answers on how to jumpstart the economy, these numbers make clear that the federal policies supporting biodiesel are paying off,” Jobe said.
“Since the EPA designated us as an advanced biofuel last year and Congress reinstated our tax incentive in December, the market has responded with incredible quickness. Plants across the country are reopening and ramping up production. This means new jobs in all sorts of sectors – manufacturing, transportation, agriculture, sales. It means plants are hiring, buying supplies and machinery, and circulating money throughout the economy.”
“The numbers also show what happens when those incentives weren’t there in 2010,” he continued. “They demonstrate what we’ve been saying, that biodiesel is still a young industry. We’re trying to gain a foothold in a business that is and always has been dominated by fossil fuels, and breaking into that business is extraordinarily difficult.”
The study's release comes as NBB is holding its annual membership meeting in Washington, DC. NBB members, representing all facets of the biodiesel industry, say they will be promoting key policy initiatives on Capitol Hill, including an extension of the biodiesel tax incentive and stability in the EPA's Renewable Fuel Standard.
Biodiesel is America’s first advanced biofuel – a renewable, clean-burning diesel replacement that can be used in existing diesel engines and meets strict specifications of ASTM D6751.
Made from an increasingly diverse mix of resources such as agricultural oils, recycled cooking oil and animal fats, it is the only nationwide, commercial-scale fuel to meet the Environmental Protection Agency's definition as an advanced biofuel, the group said.
The NBB is the national trade association of the biodiesel industry and is the coordinating body for biodiesel research and development in the US. To read its full study, click here.
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