According to a recent Minnesota Department of Agriculture economic impact study, the state’s biodiesel industry had an estimated $1.7 billion impact in 2016.

The study was based on biodiesel production of 74 million gallons, comprised of 33 million gallons of soy biodiesel and 41 million gallons of non-soy biodiesel.

Biodiesel production in Minnesota has an economic multiplier effect, meaning that it impacts various economic sectors. Besides agriculture, it affects other sectors such as manufacturing, transportation, whole and retail trade, finance, insurance, real estate and public utilities.

Every 1 million gallons of biodiesel production supports 73 jobs and contributes $22.8 million in statewide total economic output. The total employment impact estimated in 2016 was 5,397 jobs.

Specific to agriculture and rural Minnesota, according to the study, biodiesel production contributes more than $600 million in direct farm-level production output, provides added value to corn and soybeans rather than marketing them as raw commodities at farm-gate prices, and increases ag processing output by $157 million.

Minnesota was the first state in the U.S. to mandate the use of biodiesel. In 2002, the state Legislature mandated that all diesel fuels sold in Minnesota must contain at least 2% biodiesel by 2005. Since then, the mandate increased the blend level to 5% in 2009 and 10% in 2012. The mandate is scheduled to increase the blend to 20% in 2018.

Soy biodiesel, which uses soybean oil as feedstock, makes up 45% of the total biodiesel production in Minnesota. Non-soy biodiesel, which uses distillers corn oil and other fats and grease as feedstock, makes up 55% of the total.

Other biodiesel data provided in the study include:

• Minnesota has three biodiesel plants — one soy and two non-soy.

• Soy oil was historically the leading feedstock source for the state’s biodiesel production due to its availability. An acre of soybeans could yield 75 gallons of biodiesel based on a yield of 50 bushels per acre. In recent years, there has been a shift in the state toward a mixed feedstock, which includes other oils such as distillers corn oil.

• About 22 million bushels of Minnesota’s soybeans, or 5.6% of the state’s annual soybean crop, are processed into soy oil for biodiesel production.

• About 29% of Minnesota’s distillers corn oil is processed into biodiesel.

• Minnesota consumes 1 billion gallons of diesel fuel a year, of which 77 million gallons come from biodiesel. The state supplies 96% of its own biodiesel needs (74 million gallons) and imports 4% (3 million gallons). When the state’s B20 mandate kicks in next year, Minnesota’s annual biodiesel demand will reach 130 million gallons, according to the study.

• Minnesota ranks 10th in the U.S. in biodiesel production capacity and accounts for 5% of the total U.S. biodiesel production.

• The U.S. is the world’s largest biodiesel producer, with a 26% share of the world’s total biodiesel production capacity. There are 160 biodiesel plants across the country, with an annual production of 1.6 billion gallons. The Midwest region accounted for 68% of the total.

For more information about the state’s biodiesel program, visit its website.

Source: Minnesota Department of Agriculture