Demand for biofuels, especially diesel, is so intense that it’s cutting into the supply of feedstock for edible oils, some trade groups are warning.
Demand for biofuels, especially diesel, is so intense that it’s cutting into the supply of feedstock for edible oils, some trade groups are warning.
As fuel refiners add “renewable diesel” to their product mix, they’re buying up stocks of the fats used to make them: animal fat, used cooking oil, and especially soybean oil. The amount of soybean oil used for fuel is expected to reach 11.5 billion pounds this year, up by a third from 2019 and more than 45% of domestic soybean oil consumption. As a result, the head of the American Bakers Association says oil suppliers are warning his members they could run out by the end of the year.
“It’s become the diesel vs. doughnuts debate as food and fuel compete for that oil,” one observer told Financial Times.
USDA is predicting average soybean oil prices of 65 cents a pound this year, more than doubling the price from two years ago.
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