Question

Topic: Student Questions

Biodiesel Is Really Going To Pick Up In The Years

Posted by Anonymous on 8/8/2008 at 3:36 AM ET 25 Points
with almost three fold increase in the prices of soya seed it seems many biodiesel plants have already shut down their operations. in this context, is the industry really going to pick up in the years to come? is the increase of the food prices is making the industry grow in a relatively lower pace?
can i have a overall picturesque of the issue. is really the industry booming or not, presently
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RESPONSES

  • Posted by Levon on 8/8/2008 at 10:50 AM Member
    Look at how the futures for such commodities are trading historically.
  • Posted on 8/9/2008 at 1:46 PM Author
    i didnt get you actually, levon.
  • Posted by Neil on 8/11/2008 at 12:41 AM Accepted
    Luk, I think the problem right now is that some biodiesel (especially corn) is very heavily subsidized by the government as a form of fuel. The problem is that before biodiesel was so big, it was VERY highly subsidized as a food crop. Corn, therefore, is in just about everything from beef (cows are feed corn) to sweet products (corn syrup). Even many chemicals in our foods are derived from corn. It is incredible.

    So therein lies the problem, the increased use of corn for biodiesel contributes to a rise in food prices. It is an issue of food and fuel competing.

    Frankly, I think biodiesel has a future but only if the market is allowed to decide what plants fuel vehicles. It should not be politics but science and the market that decide.

    It could be switch grass or something that wins but right now the playing field is not level so we do not know what the market would prefer. We all know that we need to get off of fossil fuels, though. That much is certain.

    I would rather fill my tank with something a farmer created than something pumped out the ground in some unstable part of the world. To keep going the way we are with oil is untenable.
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