Jacques Chirac of France has installed biodiesel pumps in his presidential palace in Paris to allow him to run on the renewable fuel when he takes the presidential limo out for a spin.
The U.S. navy has a rule that all its diesel vehicles not used in military deployment must use a biodiesel fuel mix.
The European Union produced almost two million tonnes, or about two billion litres of biodiesel in 2004, about half of it in Germany. It is made from rapeseed.
Production in Europe has been increasing at a rate of 35 percent per year since 2002.
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There are three biodiesel plants in Iowa, two under construction and five more in the planning stage. State officials estimate the biodiesel industry will eventually consume more than 200 million bushels or about 40 percent of the state’s soybean production. There are more than 35 biodiesel plants in the United States.
Canada’ biodiesel industry has been slower off the mark, but is starting to rev up.
Biox Corp. in Hamilton, Ont., intends to build a 60 million litre per year biodiesel plant using vegetable oil and animal fat and Topia Energy has started work on a 20 million litre per year biodiesel plant near Sudbury, Ont.
Out west, DSG Canada in Saskatoon and Milligan Biotech in Foam Lake, Sask., are making diesel fuel additives.
These are a few developments that signal biodiesel as The Next Big Thing in agriculture.
Hopes are high for the fuel because its energy balance, which is the amount of energy produced compared to the amount of energy used to produce it, appears to be good.
Whereas ethanol’s reputation suffers from the debate over its net energy balance, biodiesel appears on more solid ground, producing 3.2 units of energy from every unit of fossil energy needed to produce it. Biodiesel also has a strong fit as a blend with petroleum diesel, especially as mandates for the use of ultra-low sulfur come into play. Biodiesel can solve low sulfur diesel’s lubricity problems.
Expanding biodiesel production in the U.S. already this harvest season was credited with helping to support soybean prices.
But will the day come when a growing biodiesel industry will cause oilseed prices to closely track crude oil prices?
That is less likely.
Given that oilseeds are a commodity, their value is determined by the price at which sellers are willing to sell, not by the value of the end use product. It is frustratingly obvious that the price of wheat is not tied to the value of a loaf of bread nor is the price of cattle tied to the value of a steak.
Supply and demand determines the price of commodities.
So while oilseed prices are unlikely to be linked to crude oil prices, developing a biodiesel industry should support oilseed prices by creating a new source of demand.
American analysts estimate that the booming ethanol industry already used more than 12 percent of the U.S. corn crop, adding 20-30 cents per bushel to corn prices.
The ethanol industry’s growth lessened American corn growers’ reliance on export markets.
It also reduced corn transportation costs because the ethanol industry is centred in the Midwest, much closer than export terminals on salt water.
A biodiesel industry could do the same thing for oilseed production, including canola.
And because of that, biodiesel is one bandwagon worth jumping on.
