The environmental credentials of biodiesel are impeccable. The use of biodiesel reduces greenhouse gas emissions compared with the use of fossil fuels. This has made it attractive to national governments seeking to meet their obligations under the Kyoto Protocol. Biodiesel also has a favorable energy balance and can be made sustainably from renewable oilseed resources.
Used as a replacement for fossil diesel, the success of biodiesel hinges on government support through subsidies and tax relief. Without such subsidies, biodiesel would not be competitive with fossil diesel.
Biodiesel is the methyl ester product of natural fatty acids, produced by the transesterification of fats and oils. It is miscible with petroleum-based diesel in all proportions. This makes it compatible with existing fuel infrastructures without major modifications. It can be used either in its pure form (referred to as B100) or admixed with conventional diesel as a 2–30% blend (“blended”). For example, B5 is a 5% biodiesel blend with conventional diesel
So how fast will it grow and how big will it get?
How rapidly the biodiesel industry will grow will be determined largely by government legislation and regulation. In general, governments use a variety of subsidies and tax breaks to stimulate demand growth. In doing so, governments have three major concerns that influence their biofuel policy:Securing energy supply and reducing dependence on fossil fuel imports Obtaining environmental benefits, including cutting greenhouse gas emissions, but also reducing sulfur emissions compared with those of fossil diesel Creating jobs in rural regions and boosting the agricultural sector