Biodiesel in the United States

1. Biodiesel in the United States Cynthia Iglesias Guven Agriculture Attache U.S. Embassy Ankara

2. Biodiesel Production in the U.S. • Expected to Rise from 25 Million Gallons in 2004 to 225 Million Gallons in 2006. • Increase in Production is a Response to the 2005 Legislation, Economic Considerations and Environment Concerns • From Soybean Oil to Recycled Cooking Oil • Currently, 66 Biodiesel Plants in the U.S. • 49 Under Construction + 8 Expansion Projects • Total Installed Capacity by Mid-2007: 1.11 Billion Gallons

3. Soy Oil is Most Important Biodiesel Feedstock in the U.S. • 70% of the U.S. Biodiesel Facilities Use Only Soyoil as a Feedstock • 20% Plants Use Multiple Feedstocks • 7% Plants Use Recycled Cooking Oils & Fats • 3% Plants Use Beef Tallow or Cottonseed Oil • Most New Plants Intend to Use Primarily Soy Oil as a Feedstock • Some Southern Coastal Plants Likely Will Use Imported Palm Oil

4. Amount of U.S. Soybeans for Biodiesel and for Exports (Millions of Bushels)

5. U.S. Vegetable Oil Consumption & End Stocks 1996/97 – 2005/06

6. Standards for biodiesel in the U.S. • ASTM D 6751-03: Only Approved up to B20 • Meets Federal Clean Air Regulations • National Biodiesel Accreditaion Commission Developed National Fuel Quality Program Called BQ-9000 • Biodiesel = Fuel and Fuel Additive with EPA • B100 = Alternative Fuel by DOE and DOT

7. ASTM D 6751-03

8. Biodiesel Usage in the U.S. • Main Reason: Environmental Benefits • U.S. Postal Service, Dept. of Defense, National Park Service • All 50 States and Most Major Cities • Public School buses • Personal Vehicles • Other

9. Biodiesel Sold in the U.S. – 5 Years

10. Federal and State Policies • 2005 Energy Policy Act • 2002 Farm Bill Authorized Biodiesel Fuel Education Program to Help Fund Education Programs on Biodiesel. • Some of the 50 States & Various Cities Have Policies to Encourage Biofuels Usage • Many States Adopted Tax Incentives and Require Use of Bio-Blends in Diesel Engines

11. Energy Policy Act of 2005 • Renewable fuel is defined as motor vehicle fuel derived from any agricultural commodity, its by-products or any other biomass. • The law does not specify a commodity based structure for meeting its increased use numbers, which can be met through a wide variety of feedstock. • Biodiesel Engine Testing Program • Biodiesel Excise Tax • Small Agrobiodiesel Producer Credit • Alternative Fuels Report, including Biodiesel

12. Energy Policy 2005 cont. • Tax Incentives: • $1/gallon (.01 per %) of biodiesel blended with petroleum diesel for first-use oils (such as soybean oil) • $.50/gallon (½ cent per %) for biodiesel made from other sources such as recycled cooking oil and animal fats.

13. Examples of U.S. State Policies • Tax Refunds or Reductions • Tax Credits/Exemptions/Loans for Production, Blending, Selling, and Equipment • Production Facility/Infrastructure Grants • Use Requirement/Incentive on All Public Diesel Vehicles • Price Preference • Promotion and Education Policies

14. U.S. Biodiesel Industry-Key Points • Relatively New Industry • Future is Unclear • Capacity is Growing • Imports Possible