NBB study outlines economic benefits of US biodiesel industry

By Erin Voegele | June 15, 2011

A study released this week by the National Biodiesel Board clearly demonstrates the positive economic impact of the biodiesel industry over the next several years. According to the study, the U.S. biodiesel industry will grow to support more than 74,000 jobs throughout the economy by 2015 while creating approximately $14 billion in household income. In addition, the report projects that the domestic biodiesel industry will generate nearly $1.6 billion in local, state and federal tax revenues in 2015. However, the pending expiration of the biodiesel tax credit could put these achievements in jeopardy.

“This shows without question that a healthy and thriving biodiesel industry is good for America,” said NBB CEO Joe Jobe. “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.”

The report outlines the difficulties faced by the U.S. biodiesel industry when the tax credit was allowed to expire in 2010, and estimates that the accompanying 42 percent drop in production immediately following the expiration resulted in the loss of nearly 9,000 jobs and a $485 million reduction in household income. In addition, the study estimates an $879 million reduction of gross domestic product (GDP).When the credit was retroactively extended through Dec. 31, 2011, the study noted that biodiesel production increased by 69 percent.

Results of the economic analysis demonstrate that the estimated expenditures that the biodiesel industry will need to meet RFS2 targets are expected to increase from $3.4 billion in 2011 to nearly $8.2 billion in 2015. According to the study’s authors, these expenditures will circulate through the economy, generating value in terms of GDP, household income and job creation. Economic activity created as a result of biodiesel production is projected to support more than 74,000 jobs in all sectors of the economy by 2015. In addition, nearly $14 billion would be created in household income.

“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 study, titled “Economic Impact of Removing the Biodiesel Tax Credit for 2010 and Implementation of RFS2 Targets Through 2015,” was conducted by Cardno ENTRIX, an international consulting firm that specializes in environment and natural resources economics. A full copy of the study can be downloaded from the NBB’s website.  

 

 
 
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