Bio diesel plant

courtesy : Bio diesel plant

Economic impact

Multiple economic studies have been performed regarding the economic impact of biodiesel production. One study, commissioned by the National Biodiesel Board, reported the production of biodiesel supported more than 64,000 jobs. The growth in biodiesel also helps significantly increase GDP. In 2011, biodiesel created more than $3 billion in GDP. Judging by the continued growth in the Renewable Fuel Standard and the extension of the biodiesel tax incentive, the number of jobs can increase to 50,725, $2.7 billion in income, and reaching $5 billion in GDP by 2012 and 2013.

#Economic impact

Energy security

One of the main drivers for adoption of biodiesel is energy security. This means that a nation’s dependence on oil is reduced, and substituted with use of locally available sources, such as coal, gas, or renewable sources. Thus a country can benefit from adoption of biofuels, without a reduction in greenhouse gas emissions. While the total energy balance is debated, it is clear that the dependence on oil is reduced. One example is the energy used to manufacture fertilizers, which could come from a variety of sources other than petroleum. The US National Renewable Energy Laboratory (NREL) states that energy security is the number one driving force behind the US biofuels programme, and a White House “Energy Security for the 21st Century” paper makes it clear that energy security is a major reason for promoting biodiesel. The former EU commission president, Jose Manuel Barroso, speaking at a recent EU biofuels conference, stressed that properly managed biofuels have the potential to reinforce the EU’s security of supply through diversification of energy sources.

#Energy security

Environmental effects

The surge of interest in biodiesels has highlighted a number of environmental effects associated with its use. These potentially include reductions in greenhouse gas emissions, deforestation, pollution and the rate of biodegradation. According to the Renewable Fuel Standards Program Regulatory Impact Analysis, released by the Environmental Protection Agency (EPA) of the United States in February 2010, biodiesel from soy oil results, on average, in a 57% reduction in greenhouse gases compared to petroleum diesel, and biodiesel produced from waste grease results in an 86% reduction. See chapter 2.6 of the EPA report for more detailed information. However, environmental organizations, for example, Rainforest Rescue and Greenpeace, criticize the cultivation of plants used for biodiesel production, e.g., oil palms, soybeans and sugar cane. The deforestation of rainforests exacerbates climate change and sensitive ecosystems are destroyed to clear land for oil palm, soybean and sugar cane plantations. Moreover, that biofuels contribute to world hunger, since arable land is no longer used for growing foods. The Environmental Protection Agency published data in January 2012, showing that biofuels made from palm oil will not count towards the renewable fuels mandate of the United States as they are not climate-friendly. Environmentalists welcome the conclusion because the growth of oil palm plantations has driven tropical deforestation, for example, in Indonesia and Malaysia. Indonesia produces biodiesel primarily from palm oil. Since agricultural land is limited, in order to plant monocultures of oil palms, land used for other cultivations or the tropical forest need to be cleared. A major environmental threat is then the destruction of rainforests in Indonesia.

#Environment  effects

#ISBC