Biodiesel Prices Rise Alongside Petroleum
High prices are causing a rethink of biodiesel policy in Seattle. As reported in the Seattle Times, Imperium Renewables has had its contact with King County Metro Transit put on "indefinite pause". In doing so, the city cited multiple concerns—the effect of biofuels on world food prices, potentially greater net CO2 output than conventional fuels—but one of the most clearly visible ones is the rising cost of the fuel itself.
Currently mineral diesel costs an average of $4.80 per gallon, while biodiesel is selling for nearly $6 locally. This is almost double the price biodiesel commanded a year ago. Input costs are at the heart of the matter: Currently it costs $4.66 to simply buy enough soybeans for a gallon of biodiesel. Add in manufacturing and distribution costs and, even with a $1/gallon tax credit, biodiesel becomes a comparatively expensive proposition and one which consumers—individuals and the municipality alike—are unwilling to pay for. This is born out by Washington State Department of Licensing statistics which show that monthly biodiesel sales fell by 66% in the past year.
To counter rising costs Imperium is looking to other feedstocks, such as the tropical shrub Jatropha curcas, which are less expensive and currently less prone to criticism on the grounds of displacing food crops. Whether this proves to be a good strategy remains to be seen. Commercial production of Jatropha oil is in its infancy, and while Jatropha can grow in marginal conditions to truly thrive it requires adequate moisture and soil conditions. If rising costs of soybeans push biodiesel producers towards Jatropha there is little to prevent farmers from switching over from food production to Jatropha production.
photo courtesy Imperium Renewables.