Grainnet

NBB's Joe Jobe: Volatile Commodity Markets Causing Strain on Biodiesel Industry; Silver Lining in Alternative Feedstock Research

by Myke Feinman, BioFuels Journal Editor

The biodiesel industry continues to struggle in the face of high-cost feedstocks and low biodiesel fuel prices that are squeezing producers’ profit margins, according to National Biodiesel Board (NBB) Chief Executive Officer Joe Jobe.

"Profitability continues to be a huge struggle during these times of enormous economic challenges in the commodities markets," Jobe said.

Soybean oil prices reached an all-time peak in March of 70 cents a pound, he said. The price went down to less than 60 cents but jumped back to prices hovering in the 60-cent plus range in April.

"Clearly, there continues to be instability in the vegetable oils markets," Jobe said.

However, Jobe thinks the industry's focus on lower-cost feedstocks is a healthy move.

"There is a silver lining to the current feedstocks situation," Jobe said. "It has resulted in more investment in ways to develop additional feedstocks."

He said research dollars have been funneled into such potential feedstocks as algae, jatropha and seashore mallow.

Another short-term solution is "virtual acres" or getting more feedstock from the same planted acreage due to scientific advancements that increase the amount of oil per acre or yield per acre.

"All of these things need more research, more advocacy, more development in terms of looking at ways our trade association can impact the development of these alternative feedstock sources," Jobe said.

In addition to profitability and alternative feedstocks, Jobe said other challenges facing the biodiesel industry include: a poor media image, and complaints from the European biodiesel industry about U.S. biodiesel imports unfairly competing with European biodiesel producers.

Media Attacks

"There has been a fierce, anti-biofuels campaign being waged in the media right now," Jobe said.

"It's primarily directed at ethanol, but biodiesel gets lumped in as well.

"It has resulted in biofuels blamed for everything from deforestation of rainforests in Brazil to bludgeoning of orangutans in Asia, to human rights violations in Asia.

"It has reached the point of absurdity.

"I’m waiting for biofuels to be blamed for male pattern baldness," Jobe added.

He said the only attack which seems to be gaining traction is rising food prices, which the NBB said are due mostly to the price of energy and not to ethanol or biodiesel.

He said the increase in food prices are also connected to a weak U.S. dollar, speculation in the commodities markets, and increases in global food demands.

'Unfair' Competition

On April 25, the European Biodiesel Board filed a complaint with the European Commission charging that the United States is subsidizing its biodiesel industry, thereby exporting low-priced biodiesel into the European market at prices European producers cannot compete against.

"The European Commission will have 45 days to respond to the complaint," Jobe said, "and then they will announce whether they will investigate the complaint."

In the United States, biodiesel producers receive a $1 per gallon credit for biodiesel produced from vegetable oils or animal fats and 50 cents per gallon for biodiesel produced from waste oils.

"If the commission investigates the complaint, it will investigate individual U.S. biodiesel companies," Jobe said, and they will choose whether to assess duties on future shipments on an individual company basis.

Those credits are currently due to expire in December.

"The commission could impose penalties against individual U.S. biodiesel producers," Jobe added.

"We've been defending the industry against these allegations and complaints," Jobe said. "We will wage a vigorous defense against this complaint."

For more information, call 573-635-3893.