Biodiesel Profits Elusive as Costs Rise

from Reuters financial newswire:
By Timothy Gardner - Analysis

CHICAGO (Reuters) - Profits for making biodiesel from U.S. soybeans are elusive because capacity to make the renewable fuel has surpassed demand while the costs to make it keep rising.

U.S. biodiesel sales have soared on record oil prices, and as the renewable fuel has been promoted as low in greenhouse gas output. Sales tripled last year to about 250 million gallons and will be higher this year, according to industry group the National Biodiesel Board.

But the sales jumps have had the side effect of helping to spike prices for soyoil, the main U.S. biodiesel feedstock, to nearly 33-year highs. Plants that make biodiesel are running well below capacity because of rising costs.

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