Biodiesel benefits challenged

Biodiesel benefits challenged

The Ontario Trucking Assn. (OTA) is questioning the sustainability of biodiesel as an appropriate renewable fuel, citing a recent report that concludes that biodiesel yields less energy than that required to produce the fuel

The Ontario Trucking Assn. (OTA) is questioning the sustainability of biodiesel as an appropriate renewable fuel, citing a recent report that concludes that biodiesel yields less energy than that required to produce the fuel.

According to a study published in March conducted by Dr. David Pimentel, professor of ecology and agriculture at Cornell University, biodiesel production using soybeans required 27% more fossil energy than the biodiesel fuel produced, and sunflower-based biodiesel required a staggering 118% more.

Indeed, the U.S. Energy Information Administration (EIA) has noted that biodiesel has an energy content that is 11% lower than petroleum-based diesel.

An EIA report published on June 2004 on biodiesel concluded that unless soybean oil prices drop dramatically, it doesn’t appear that biodiesel can be produced in large quantities at a cost that is competitive with petroleum diesel. EIA did note that the ultra low sulfur diesel (ULSD) program will offer an opportunity for biodiesel as a lubricity additive, since “the cost disadvantage…would not be as great.”

In the U.S., the energy bill that was signed into law this week includes a renewable fuels standard. In 2006, four billion gallons of renewable fuel—particularly ethanol and biodiesel—will be mixed in with the on-road gas and diesel supply. The renewable energy quota will be ratcheted up to 7.5 billion gallons by 2015.

Refiners will determine the ratio of biodiesel to ethanol to fulfill the mandated production requirement. Rich Moskowitz, assistant general counsel and regulatory affairs counsel for the American Trucking Assns., told Fleet Owner in an earlier interview that any expanded biodiesel production spurred on by the bill won’t likely result in price increases at the pump.

According to a Dept. of Energy Alternative Fuel Price Report published in March, in the Midwest region, 20% biodiesel averaged $2.18 per gallon, which is 1.6 cents cheaper than $2.196 for conventional diesel. However, in the Gulf Coast region, biodiesel was $2.32, a 14-cent premium over $2.18 conventional diesel. Because of the transportation costs of biodiesel, refiners are likely to distribute biodiesel closer to soybean growing areas in the Midwest.

American biodiesel producers are currently enjoying an excise tax credit of $1 per gallon for biodiesel.

The Ontario Ministry of Agriculture Food and Rural Affairs has indicated that it is working on a policy that would incorporate biodiesel as a component of its own renewable fuel standard. This has raised the red flag among Ontario trucking interests.

“It’s not the environmental ministry that’s doing this-- it’s the agricultural ministry that has a lead on this,” Doug Switzer, OTA manager of government relations told Fleet Owner, adding that a need for a biodiesel standard is questionable considering Ontario is about to implement its own ULSD rule.

“The cost would be absorbed by the users,” Switzer continued. “It’s the trucking companies that would have to buy this product. To us [mandating biodiesel] could be a lead on the agricultural industry on the back of the trucking industry.”

“Given that there is no scientific basis supporting the environmental benefit of using biodiesel given the introduction of clean diesel and smog-free engines beginning next year, we cannot accept the imposition of the potential cost burden for the trucking industry and the Ontario economy from mandating biodiesel,” David Bradley, OTA president said in a news release.

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