US biodiesel industry faces tough times, but Sudanese farmers remain hopeful

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The Obama administration is keen to create

, but it is unlikely to do so this year for the US biofuel sector.

That is a shame, because biofuel represents one of the more labour intensive segments of the alternative energy scene, employing farmers to grow fuel crops, refinery workers to process the oil and pump attendants to sell it.

Industry officials predict that US biodiesel production already fell by more than a half last year to between 300 million and 350 million gallons from 700 million gallons in 2008. That was after rising for nine consecutive years. (


The recession and lower crude prices were partly to blame, as was European protectionism. In March of last year,

for biofuels. Since Europe previously consumed about 95 per cent of global exports, that hit producers in other regions hard.

The nearly 180 biodiesel plants operating in 40 US states had just one thing keeping most of them from closing their doors: a US$1 per gallon federal tax credit. But that expired on New Year's Day, reportedly because US legislators were too pre-occupied with the health care bill to find the time to renew it.

"By the time you buy the feedstock and the chemicals to produce the fuel, you have more money in it than you get for the fuel without the tax credit," Dwight Francis, who recently started up a biodiesel plant in Oklahoma, told the

. "We won't be producing any without the tax credit."

According to the US

, the industry is operating at only 15 per cent of its capacity countrywide. The biggest US biodiesel refinery, in Houston, has been idled.

The country's ethanol producers, who make biofuel that can be blended with petrol, are not doing much better, as we recently reported


Meanwhile Sudan's government has

to turn the impoverished African country into the continent's leading biofuel producer by growing rain-fed sugar cane on arable land in the south of the country, between the White and Blue Niles.

Since Sudan has untapped agricultural potential equivalent to roughly three times the area of Great Britain, the project has the potential to work well for the country, provided it can avoid destroying too much of the planet's biggest swathe of inland wetlands, which are critical for biodiversity. A good sign is that Brazilian biofuel industry experts are keen to collaborate with Sudan.

Brazil is the world's leading biofuel exporter, with most of its output coming from sugar cane. According to the UN's

, it is also the only major biofuel producer so far that has got things right, mostly by avoiding cutting down rainforest to accommodate fuel crops.

Pic by Matt Brown: A militiaman stands amid arable land in southern Sudan, where the government hopes to grow sugar cane for biofuel.