Some US truck drivers oppose palm biodiesel

22 February 2007 23:26  [Source: ICIS news]

HOUSTON (ICIS news)--Some US truck drivers who use biodiesel think it ought to be made from domestic feedstock and not palm oil, a truck driver said on Thursday.

The use of biodiesel is “supposed to be about getting away from imports and dependence on foreign sources”, the driver said.

Rising costs of biodiesel that is derived from soybeans has made biofuel that uses imported palm oil more attractive in the US.

The main feedstock used in US biodiesel domestic refined soybean oil. However, crude soybean oil prices have risen from about 27-28 cents/lb mid-2006 to over 30 cents/lb ($661.20/tonne) in the current market.

Crude soybean oil prices last settled front-month March futures at 30.1 cents/lb on the Chicago Board of Trade (CBOT). Trading on Thursday clustered at about the same level, but forward months July and August were about 1 cent/lb higher in bid/offers.

Biodiesel participants said refined soybean oil is usually 2-3 cents/lb higher than crude, due to the refining process, adding that prices in the 30s cents/lb were sharply cutting into profit margins.

As the profit margins get shaved by soybean costs, US biodiesel producers are turning to other domestic feedstocks, such as fatty acid methyl esters (FAME, mostly from animal fats) and methyl esters derived from cottonseed oil.

But a few are bringing in palm oil from Asia to use as a feedstock when the supplier is integrated to sources that make it economical to do this, sources said.

Since most sources agree truck market acceptance is a big part of the picture in biodiesel gaining market share in the $1bn US diesel market, palm oil as a competing feedstock could become an issue in the mainstream US midwest.

By: Judith Taylor
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly