Delay in the definition of standards of renewable fuels in 2015 has led to a serious decline in the production of biodiesel in the United States.
In particular, last year the Western Dubuque Biodiesel company, located in Dubuque County, Iowa, worked for 57 per cent of its capacity, producing 64.35 million liters of biofuel from 113,600,000 possible. This year the productive of the company capacity is for 50% only.
In mid-December last year, the Congress of the United States has decided to terminate the tax credits for the production of biofuels once again. At the same time, the Agency on Environmental Protection has not taken the content of the norms of bio-ethanol and biodiesel in automotive fuel, which led to decrease in production across the country. In addition, the agency withdrew the production limits proposed for the current year.
General Director of Western Dubuque Biodiesel Tom Brooks commented: "All our tanks are already filled, because no one buys biofuel. How can we sell the products to the client, who does not know what the proportions of the fuel mixture will be? It is a complete collapse of the business."
In 2014, the production of biodiesel in the United States declined from 6.8 billion to 6.6 billion liters. The decline was almost imperceptible in Iowa and today this state is the leader of the national industry, generating about 16% of total production.
But the fall in prices of 25% led to the fact that profitability has fallen sharply and the number of plants was forced to announce the complete cessation of production or to send staff on vacation without payment.
Western Dubuque Biodiesel, which is the factory with more than twenty people of the employees, isn’t among these companies yet. Its closure could cause a severe blow to the transport companies in the region and lead to a state of instability in the local economy.
"The situation for investors is extremely hazy because they do not know how to develop the industry. And we bear the additional costs, cycling its production capacity is only half. In this mode, we lose 6 cents in the production of one liter of fuel. The daily loss is about $ 55 - 60 thousand dollars. In addition, our employees are beginning to doubt the correctness of his choice in employment "- added Mr. Brooks.
Fortunately, the state tax policy cushions an impact for the local producers, avoiding production cuts and massive layoffs of personnel. But mostly the situation will depend on the decision of the federal government. If the decision on the establishment of new standards for renewable fuels will be taken, and tax credit policies will continue, then the industry will receive a powerful impetus to the development.
