Projected Availability Of Fats, Oils, And Greases In The U.S.

PROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.Methodology12AVAILABILITY10Biofuel ConsumptionBiodiesel consumption data wasretrieved from the Energy InformationAgency (EIA, 2012, 2014, 2016a) andcan be found in Figure 2. EIA datareflects only feedstock use in biodieseland does not include informationabout renewable diesel feedstocks.Renewable diesel from domesticfeedstocks was calculated by subtracting total biodiesel produced inthe United States (EIA, 2016a) fromtotal domestically produced BBD usedfor RFS compliance (EPA, 2016a).PRODUCTION ANDCONSUMPTION OF OILSAND FATSVegetable OilsHistorical data on the production,trade balance, and change in stocks ofWORKING PAPER 2016-15 8Billion PoundsAva i l a b i l i t y o f f e e d s to c k s wa sd e te r m i n e d by s u b t ra c t i n g t h eprojected trade balance (exports—imports) and consumption in non-fuelindustries from projected production.Trade balance is treated as consumption when exports are greater thanimports and production when importsare greater than exports. Relativelycomplete information on the totalproduction and consumption offeedstocks in livestock feed, edibleproducts, industrial products, tradebalance, and ending balance (endingstocks—beginning stocks) were usedto determine if any production or consumption had not been considered. Aremainder term of approximately900 million pounds was consumedthat had not been assigned toa specific consumption category(this is equivalent to approximately2.4% of total production of FOGin this analysis). We deemed thisthe “other consumption” categoryand held it constant through theprojection period.Soybean oilOther*Palm oilRecycled OilsCorn oilAnimal FatCanola oil6420201020112012201320142015Figure 2. U.S. inputs to biodiesel productionSource: (EIA, 2012, 2014, 2016a)*Notes—Renewable diesel feedstocks are not shown. Palm oil is not currently RFS eligible.vegetable oils was retrieved from theUSDA oil crops yearbook (USDA-ERS,2016a, b, c). Future production ofsoybean oil was retrieved from themost recent USDA ten-year projections (Wescott & Hansen, 2016).Future production of canola oil wasprojected out based on a historicallinear trend. Future production ofinedible corn oil was projected toremain flat at 2015 levels. Inediblecorn oil used as a BBD feedstock ismainly extracted from distillers grainsafter the production of corn ethanol.Corn ethanol production in theUnited States is unlikely to increasesubstantially as its support under theRFS is limited. The non-advancedrenewable fuel volume is capped at15 billion gallons from 2015 onward(EPA, 2010a), and the proposed nonadvanced renewable fuel mandateis set at 14.8 billion gallons for 2017(EPA, 2016a). Furthermore, corn oilextraction yields have leveled off andfractionation technology has alreadybeen incorporated into most ethanolplants (Jessen, 2013). Edible cornoil production, however, is expectedto increase proportionally with cornproduction increases projected bythe USDA. A detailed breakdownof vegetable oil consumption infood, livestock feed, and industrialuses (US Census, 2004, 2005, 2007,2009, 2011) and biodiesel inputs(EIA, 2012, 2014, 2016a) were usedto develop a baseline consumption breakdown. We then projectedthe use of vegetable oils in food toincrease in proportion to populationgrowth, using population projectionsfrom the USDA ten-year projections.Since 1980, the total consumption of FOG in edible products hasincreased substantially according toUSDA data (USDA-ERS, 2016d). Weprojected the use of vegetable oils inlivestock feed to increase proportionally to increased livestock production(projected by the USDA). And finally,we projected the use of vegetable oilsin industrial products to be constantat 2015 levels based on the preferreduse of tallow in industrial productswhen available (McGlashan, 2006,Cahoon et al., 2009).Animal FatsA ra t i o o f m e a t to a n i m a l fa tproduction was calculated based onmeat (USDA-ERS, 2016e) and animalfat production (US Census, 2004,2005, 2007, 2009, 2011) data from2003-2010. We then applied thisratio to the historical and projectedmeat production (USDA) for 2011onward to estimate the amount offat produced. Detailed consumption of animal fats in industrialINTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION3

PROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.Yellow GreaseHistorical data for the production ofyellow grease from 2003-2010 wasavailable in the U.S. Census reports.Due to a lack of a statistical trend andassumed maturity of the yellow greasemarket in the United States (Lane, 2016,Schwab et al., 2016, Brorsen, 2015), wemade an overall assumption that theproduction of yellow grease has beenand will continue to be constant from2011 onward. Consumption data foryellow grease was estimated based onhistorical trade balance and consumption data available in the U.S. Censusreports. We predicted that constantproduction of yellow grease will resultin no change in yellow grease consumption in livestock feed. IncreasedFOG consumption in livestock feed isexpected to come from other sources.Trade BalanceExports and imports of all goodsare highly dependent on policies ofother countries. Because there is noaccurate way to predict the futureeffect of policies in other countries,the projected trade balance (exportimport) of all FOG was held constantat 2015 0100002008 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022CanolaYellow GreaseOther GreaseCornSoybeanMillion Pounds Soybean Oil25,0006000Million Poundsuses in the U.S. Census reports andtrade balance data retrieved fromthe National Renders Association2015 Market Report (Swisher, 2016)were used as a baseline for futureconsumption projections. The projections on future meat productionand population growth (Wescott &Hansen, 2016) were used to extrapolate future consumption of animalfats in livestock feed and edibleproducts. Consumption of animalfats in industrial products wasassumed to remain constant for fattyacids, resins and plastics, paint andvarnish, and soap following historicaltrends (or future projections in thecase of soap) (USDA-ERS, 2016f)and to increase at a rate of 6.6% forlubricants (Grand View Research,2016; BusinessWire, 2016).0TallowFigure 3. Historical and projected future production of fats, oils and greases(soybean oil on right axis)Source: USDA Economic Research Service, rbook.aspx for 2008–2015. Years 2016–2022 are projected.Results and DiscussionOVERALL TRENDS INPRODUCTION ANDCONSUMPTIONTrends of vegetable oil, animal fats,and yellow grease production areshown in Figure 3. Vegetable oil isgenerally expected to increase as aresult of increased yield (Westcott &Hansen, 2016). We also predict thatanimal fat production will increase inline with increased meat productionprojected by the USDA. This is adeparture from the current markettrend in which meat consumptionhad significantly decreased from2008–2014. Changing lifestyle hashad a part in the decreased consumption of meat; however, it isbelieved that the recent economicrecession is the main cause for thedecline over this period. Accordingto the USDA, this trend is expectedto revert back to positive as lowerproduction costs of meat and thuslower prices will increase demand formeat in the United States. Livestockproduction costs are expected todecrease as a result of falling energyprices, which will reduce fuel andfertilizer expenses for producers.Unlike vegetable oil and animalfats, yellow grease production isINTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION assumed to remain constant over theprojected period. This assumptionwas based on relatively flat yellowgrease production from 2003–2010(US Census, 2004, 2005, 2007, 2009,2011), and the maturity of the yellowgrease market (Lane, 2016, Schwabet al., 2016, Brorsen, 2015).Consumption of FOG in ediblep r o d u c t s , l i ve s t o c k f e e d , a n dindustrial uses is shown in Figure 4.We assumed that the consumption ofFOG in edible products will increaseas a result of increased population,in line with a long-term trend ofincreasing FOG consumption in food.We also predicted that consumptionof fats in livestock feed will increasewith increased meat production.Livestock animals are able to producemore fat than they consume in feed.Thus, the amount of fats producedfrom livestock will be greater thanthat used in livestock feed.Consumption of FOG in industrialproducts will also increase throughoutthe production period. We predictedthat soybean oil, corn oil, and tallowwill be used in industrial productsbased on their low price and availability. Increased use in industrialp ro d u c t s i s a d i re c t re s u l t o fincreased demand for biodegradableWORKING PAPER 2016-15

AVAILABILITY OF VEGETABLEOILSSoybean OilOver the past five years soybean oilhas been the most utilized biodieselfeedstock (Figure 2; EIA, 2016a).This is mainly due to low prices andabundance of soybean oil, as a resultof its standard use as a rotationcrop for corn. Increased corn yields,reduced nitrogen expenses, andreduced rootworm managementWORKING PAPER 2016-15 0016,0004,00015,0002,00002008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Livestock FeedNet ExportsOther ConsumptionIndustrial UsesAvailability for BBDEdible ProductsMillion Pounds Edible Productslubricants and oils. This industry isexpected to increase at a rate of atleast 6.6% year over year (GrandView Research, 2016; BusinessWire,2016). We expect tallow consumption to increase proportionally basedon its prominent use in lubricantsand industrial products generally(McGlashan, 2006, Flinn, 2011; Sallmonet al., 2010). All other industrial usesof FOG are expected to remain flat.Other industrial uses of FOG includesoap, fatty acids, paint and varnish,resins and plastics, and other inedibleproducts. Historically FOG usage insoap has dramatically decreased sincethe production of petroleum basedsoaps and detergents began in the1950s (Swisher, 2006). Over the lastfive years, however, FOG usage hasmaintained a flat trend. Projectionsdiffer for the future of FOG usage insoaps: usage could increase as environmental concerns increase demandfor naturally based products or itcould decrease as petroleum baseddetergents continue to get cheaperand better formulations decrease therisk to the environment. Therefore,we took an average of the relativelyflat soap production over the last fiveyears and projected a continued trendof constant production. The remainingindustrial uses (fatty acids, paint andvarnish, resins and plastics, and otherinedible products) were averagedover the 30-year period of availabledata (1980–2010) and assumedto remain constant as we were notable to identify any trends for thesecategories (USDA-ERS, 2016f).Billion PoundsPROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.14,000Historical Usein BiodieselFigure 4. Historical and projected future consumption of fats, oils, and greases by end use(edible products on right axis)Availability displayed as year over year change.costs are a few advantages toplanting soybean in rotation withcorn that have led to soybean beingthe second most planted of any cropin the United States (Morrison, 2013).Soybeans have relatively low oil yield;the bulk of the value of soybeans is inthe protein-rich soy meal (Cromwell,2012). However, soybean o

of yellow grease. Soybean, canola, and edible corn oil production are all projected to increase, largely as a result of yield improvements. We expect inedible corn oil production to remain roughly constant as demand for corn ethanol under the RFS is unlikely to grow significantly after 2016, and improvements in corn oil extraction have leveled .