The Biodiesel Economy and Biodiesel Policy

Abstract

Commercial production of biodiesel began in the 1990s. Biodiesel has become more attractive recently because of its environmental benefits. Limiting factors of the biodiesel industry are feedstock prices, biodiesel production costs, crude oil prices, and taxation of energy products. The economic benefits of a biodiesel industry would include value added to the feedstock, an increased number of rural manufacturing jobs, increased income taxes, increased investments in plant and equipment, an expanded manufacturing sector, an increased tax base from plant operations and income taxes, improvement in the current account balance, and reductions in health care costs due to improved air quality and greenhouse gas mitigation. Biodiesel, produced mainly from rapeseed or sunflower seed, comprises 80% of Europe's total biofuel production. The European Union accounted for nearly 89% of all biodiesel production worldwide in 2005. Germany produced 1.9 billion liters, or more than half the world total. Other countries with significant biodiesel markets in 2005 included France, the United States, Italy, and Brazil.