U.S. Biodiesel Production and Feedstocks Usage Five Year Outlook

posted by Jing Tang on Tuesday, March 3, 2020

The U.S. Energy Information Administration (EIA) published its Monthly Biodiesel Production Report on February 28th, 2020. In this article, we will conduct a descriptive analysis of pure biodiesel (B100) production and its feedstocks usage.

Biodiesel Production and Five-Year Average

EIA reported 133 million gallons of pure biodiesel was produced in December 2019, which was 6 million gallons more compared to November 2019, and 35 million gallons less compared with December 2018. Total production dropped 7% in 2019, with 1,725 million gallons, compared to 2018, with 1,857 million gallons. In Figure1, the red dashed line represents the pure biodiesel production in 2019. The green solid line represents the pure biodiesel production in 2018. The gray bar represents the 5-year average (2014 to 2018) biodiesel production for each month. From January 2019 to October 2019, the 2019 biodiesel productions were higher than the 5-year average. Production in November 2019 was 5.8 million gallons less than the 5-year average, and 33 million gallons less than it was in November 2018. Production in December 2019 was 11.2 million gallons less than the 5-year average production.

Biodiesel Feedstocks Usage Five Year Outlook

Figure2 shows the monthly usage of vegetable oils, i.e., canola oil (represented by red color), corn oil (green color) and soybean oil (blue color), in biodiesel production from January 2014 to December 2019. Some data records for canola oil are missing because EIA withheld them to avoid disclosure of individual company data. Soybean oil remains the largest vegetable oil input for the entire study period.

In 2019, soybean oil inputs to biodiesel production were 7,318 million pounds (59.2% of total feedstock input in the year of 2019), 224 million pounds less than 2018 soybean oil input. Canola oil input was 1,234 million pounds to biodiesel production (9.98% of total feedstock input in 2019), 37 million pounds over 2018 canola oil input. Corn oil input was 1,760 million pounds (14.24% of total feedstock input in 2019), 325 million pounds less than 2018 corn oil input.

Moreover, we applied simple liner regression models on vegetable oil inputs. With time moving forward, we observe significant increasing trends for all three vegetable oil inputs over time, shown in blue, green and red colors, respectively. For the last three years, the percentage of soybean oil input has been slightly increased among all the vegetable oil inputs, from 67% to 71%.

Figure3 shows the monthly usage of animal fats and recycled feeds, i.e., poultry fat (represented by yellow color), tallow (blue color), white grease (green color, also called choice white grease) and yellow grease (red color), in biodiesel production within the same study period. Again, some data records for poultry fat and tallow are missing, because EIA withheld them to avoid disclosure of individual company data.

Yellow grease (includes recycled cooking oil) was the top animal fats and recycled feeds input to U.S. biodiesel production from 2014 January to 2019 December. Yellow grease usage, in December 2019, was 113 million pounds only 2 million pounds over compared with November 2019. Annual yellow grease usage declined 13.4% compared to total yellow grease inputs in 2018. Total 2019 tallow input, with 292 million pounds, dropped 40% compared to the 2018 input, with 484 million pounds. White grease annual input was also decreasing 13.3% from 617 million pounds in 2018 to 536 million pounds in 2019. For poultry fat, it increased 22.6% from 133 million pounds in 2018 to 163 million pounds in 2019.

Animal fats and recycled feeds usage captured about 15% of total feedstock usage in the year of 2019, which are yellow grease at 8%, following by white grease with 3%, tallow 1.6%, poultry fat 1.6%, with “other” input unknown. The animal fats and recycled feedstock usage declined about 8% from the year of 2018, with 3,124 million. Additionally, from the regression models, only yellow grease input has a significant increasing trend over the study period shown as the red equation in Figure3. White Grease had a peak from December 2016 to March 2017 and maintains from 40 million pounds (25% quantile) to 55 million pounds (75% quantile). Tallow holds from 24 million pounds (25% quantile) to 41 million pounds (75% quantile), with some unknown. Poultry fat retains from 12 million pounds (25% quantile) to 18 million pounds (75% quantile), with some unknown.

In conclusion, the inputs of biodiesel production will continuously trend up as the biodiesel production growing, leading by soybean oil, from vegetable oil inputs, and yellow grease, from animal fats and recycled feeds inputs. Other vegetable oils, i.e. canola oil and corn oil, will significantly increase as well, not as much as the soybean oil growth. White grease, tallow, and poultry fat will maintain as a relative stable level.