LUBBOCK, Texas (RFD News) — U.S. biodiesel and renewable diesel plants may need to operate near maximum capacity to meet higher federal blending requirements, potentially strengthening demand for soybean oil and other agricultural feedstocks. CoBank lead economist Jacqui Fatka says the industry is already running at high utilization rates.
Fatka estimates plants are operating in roughly the 80 percent to upper-80-percent range, but utilization may need to exceed 90 percent to satisfy current Renewable Volume Obligations (RVO).
The higher mandates have created strong demand for agricultural feedstocks, particularly soybean oil. Imported fuels and feedstocks can also help meet federal requirements, adding another variable to domestic demand.
Fatka says sufficient Renewable Identification Number (RIN) generation will be critical. Failure to meet current requirements could eventually slow or reduce future mandated growth, weakening the market signal for agricultural feedstocks.
For soybean producers, continued biofuel expansion increasingly depends on whether refiners can physically produce and blend enough fuel to meet federal targets.
