Biodiesel is not the death knell for the largely petroleum-based diesel fuels industry, but may serve more to balance the competitive landscape than to tip the scales in favor of biofuels, according to a study by Kline and Co, a business consulting and market research firm.
According to Kline information, supply of raw materials required for biodiesel to replace petroleum-based diesel is not available, even on a worldwide scale.
"Even if all of the corn and soy being grown in the United States right now were used to make biodiesel in its 100 percent vegetable oil form, it would only satisfy about 15 percent of the current demand for diesel fuel," according to Geeta Agashe, director of the petroleum and energy practice for Kline's research division. "And if we were to use all that corn and soy for fuel, that takes away from our supply for food, as well as the many other non-food products that rely on corn and soy as a base component."
Kline's research indicates that, even as a niche play, biodiesel is still a tremendous opportunity for both raw material suppliers and producers. It provides farmers with a new market for their crops and holds the promise of high profits for food conglomerates and other members in the value chain, Kline said.