FAPRI predicts growth in biomass-based diesel production

By Erin Voegele | April 05, 2021

The University of Missouri’s Food and Agricultural Policy Research Institute in mid-March released its 2021 U.S. Agricultural Market Outlook, predicting U.S. biomass-based diesel production will reach 3.3 billion gallons in 2026.

The report notes that the COVID-19 pandemic upended agricultural markets over the past year. Looking ahead, FAPRI said the outlook for agriculture “is uncertain, but certainly more optimistic than it was a few months ago.”

While ethanol production fell in 2020 due to the impacts of the COVID-19 pandemic, FAPRI notes that the production of biomass-based diesel actually increased slightly despite the pandemic. Growth is expected to continue, with production exceeding 3 billion gallons next year and reaching 3.3 billion gallons in 2026. Production is currently expected to plateau after that time through the 2030 projection period.

According to FAPRI, the biodiesel blenders credit and increasing Renewable Fuel Standard requirements for biomass-based diesel beyond 2021 are expected to lead to a quick recovery in biodiesel net returns. Moderating feedstock costs are expected to lead to a rise in nominal net returns for biomass-based diesel production.

Methyl-ester derived from soybean oil and renewable diesel each make up approximately 35 percent of total domestic biodiesel production over the projection period, according to FAPRI. Methyl-ester from corn oil and other fats and oils are expected to make up the remaining share of biomass-based diesel.

According to the report, the U.S. is expected to remain a net biodiesel importer through 2030, but by a small margin. Biomass-based diesel imports are expected to average 201 million gallons per year through the projection period, with biodiesel exports averaging approximately 118 million gallons.

A full copy of FAPRI’s 2021 U.S. Agricultural Market Outlook can be downloaded from the University of Missouri website

 

 
 
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