Biodiesel’s two decades of growth in Illinois

BLOOMINGTON, Ill. — Through the foresight of farmers campaigning for a sales tax exemption over two decades ago, biodiesel production in Illinois has increased fifteenfold.

The Illinois Soybean Association through the checkoff played a major role in pushing for the state lawmakers to approve legislation establishing the biodiesel sales tax exemption in 2003.

The impact of that legislation for Land of Lincoln soybean growers is apparent in the data.

According to the U.S. Energy Information Agency, biodiesel production of any note began in Illinois in 2001 with 2.898 million gallons produced and increased to 2.982 million gallons the following year.

In 2003, the year biodiesel tax incentives legislation moved through the General Assembly, production reached 3.99 million gallons.

With passage of the incentives, production jumped to 6.384 million gallons in 2004, 13.692 million in 2005, 15.583 million in 2006 and 38.22 million in 2007. Production hit 42 million in 2009.

EIA’s most recent data from 2022 notes Illinois is ranked third nationally in biodiesel production, producing more than 168 million gallons.

Iowa was the top producer at 349 million gallons, followed by Missouri’s 203.616 million gallons of biodiesel.

One bushel of soybeans can yield approximately 1.5 gallons of biodiesel, according to the U.S. Department of Agriculture’s National Institute of Food and Agriculture Cooperative Extension.

As part of its 60th anniversary series, ISA representatives reflected on the opportunities it created for soybean growers.

“Soybean farmers built a brand new industry that didn’t exist before the investment of the checkoff,” said Rebecca Richardson, MARC-IV Consulting regulatory and education specialist and former ISA director of operations.

“With the advent of the Food and Drug Administration’s labeling of trans fats in the early 2000s, there was concern that there would be even further degradation of pricing for soybean oil, which ended up happening.

“So, farmers saw far enough ahead to know they were going to need to invest in ways to create new uses for the soybean oil aspect.”

“Biodiesel stands out because it was the first large volume, new use that was developed using checkoff dollars, and then the regulatory framework for success was developed by the association,” said Ron Kindred, ISA chairman and Atlanta, Illinois, farmer.

“It was a great partnership and collaboration and it’s just been a huge success story for us.”

“Policy work has to be a two-way street. It has to be a good win for you, but it also has to be a win for the constituents of the legislators that you’re working with,” Richardson added.

“In 2003, we were able to accomplish and the governor signed our bill into law that provided a sales tax incentive for blends both below and above B10. That was why B11 was born, because any blend above B10 got a complete sales tax exemption for every gallon that you purchased that had any blend above B10 in it.”

Rob Shaffer, an El Paso, Illinois, farmer, American Soybean Association director and former ISA director, noted the return-on-investment created by biodiesel.

“To me, the best ROI on a checkoff dollar is biodiesel, and the reason being is I can do the math back to my farm where biodiesel adds $1 per bushel to every bushel I raise. So, if I raise 50-bushel soybeans, I get $50 an acre just from biodiesel,” Shaffer said.

B20 Club

The B20 Club of Illinois, a partnership between ISA’s checkoff program and the American Lung Association, has played integral part in promoting the use of higher blends of biodiesel.

The club represents a diverse group of Illinois fleets, companies and organizations dedicated to cleaner air and more sustainable operations through production and use of biodiesel.

Since 2014, B20 Club-member fleets have used more than 110 million gallons of biodiesel blends of 20% and higher — reducing emissions, supporting the economy and improving the quality of life for all Illinoisans.

Starting with a handful of fleets in 2014, the B20 Club has since grown to 30-plus members, representing a cross section of the transportation industry.

Fleet members represent municipalities, park districts, fuel suppliers, mass transit operators, trucking companies, utility companies, marine vessel operators, environmental companies and more.

Affiliate members include not-for-profits, government agencies and other organizations that support B20 as a high-quality fuel source. Associate members encompass biodiesel producers and marketers.

Shaffer said the notion of the B20 Club came about at an M-PACT Fuel and Convenience Trade Show in Indianapolis.

“We’re sitting there after a show spit-balling some ideas, and we’re like, why don’t we come up with an idea of B20, and somehow it came up with a B20 Club, to form a group where they could network to say, hey, we’re doing this,” Shaffer said.

“The B20 Club is a collaboration, it’s a partnership between primarily the American Lung Association and the Illinois Soybean Association. The reason why we have that partnership is because we were looking for a strategy to target fleet managers, and fleet managers don’t necessarily intersect with farmers very often,” Richardson said.

“There was really no reason not to use B20, except for the fear factor of just the unknown. That was what the B20 Club was really about, to target a few fleets to talk about their experiences to other fleet managers that would reassure them that they could try it without too much risk.

“We started with B2, B3, and now, only 20 years later, we’re at B20, and I just feel so proud about that accomplishment.”

Looking Ahead

“We’ve still got a tremendous future for biodiesel. I see big potential markets in the rail industry and in the maritime industry that can utilize biodiesel going forward,” Kindred said.

“With the new products, renewable diesel and sustainable aviation fuel, we’ve only just begun. We’re broadening that area of alternative fuels in a way that it’s going to make the world a lot better place for my kids and my grandkids, and what better thing could you hope for than that,” Richardson said.

“All checkoffs at their base have the same goal. That is to create demand and create new products, create new markets and partner hopefully with marketing and private industry to be able to build an industry from something that you start. That’s exactly what’s happened with biodiesel.

“Only soybean farmers invested in biodiesel in the 1990s. So, there is no other product, there is no other thing we can say, had it not been for soybean farmers, it would never have happened, but we can say that about biodiesel. That, in and of itself, just that one piece of the checkoff, way more than pays back the investment that farmers make every year when they pay their checkoff.

“So, as farmers ourselves, we are very, very proud of biodiesel. We like the product, we like what it represents, we like the story behind it. It’s a wonderful story about how successful a checkoff can be when the farmers have vision, and they take their role seriously and they try to see 10 years into the future and think, what can we do to build demand that’s sustainable and perpetual?

“Biodiesel is a perfect story to tell that message.”