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Wisconsin Soybean Program: Biodiesel plant closure underscores need for policy solutions

Categories: WSA, WSMBPublished On: March 1, 20241.6 min read

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The Wisconsin Soybean Association (WSA) and Wisconsin Marketing Board (WSMB) are extremely disappointed in today’s announcement that Chevron is indefinitely shuttering its biodiesel facility in Madison.  

“With crop prices dropping and input costs stubbornly high, this news is unwelcomed and disheartening for our farmers,” WSA President Sara Stelter said. “We recognize that this is a complex situation, but the pause on production in these plants is more stark evidence that Wisconsin’s legislative leaders should look at how neighboring states have supported legislation that uplifts the biofuels industry – rather than hurting producers.”   

There are several potential legislative remedies to address ongoing uncertainty in the biofuels market and soybean industry. First, the state could pass legislation to create tax credits and incentives for biodiesel producers, along with advocating for higher blends of biodiesel. WSA also continues to support the development of a CHS soybean crush plant in Evansville, which could process up to 70 million bushels of soybeans each year. Legislation that offers tax incremental financing assistance for the facility passed the Wisconsin State Senate in late February.

In 2023, the country’s consumption and production of biomass-based diesel increased by 1 billion gallons over the previous year. The American Soybean Association, of which WSA is a state affiliate, also supports federal tax credits that improve the biofuels industry.   

Biodiesel directly benefits Wisconsin soybean growers, and both WSA and WSMB continue to strongly support implementing policies and initiatives that encourage the adoption of biofuels. B20 (20 percent biodiesel) adds nearly $2 to every bushel of soybeans and increases demand for soybeans by 13%. With the potential for growth in the sustainable aviation fuel market, Wisconsin is missing a huge economic and environmental opportunity by not creating a more favorable environment for biouels to thrive.   

“Thanks to farmers’ checkoff investments for over 20 years, biodiesel creates jobs across Wisconsin and has helped add to farmer profitability,” said Adam Kask, executive director of WSMB. “We are hopeful this serves as a wake-up call across the industry.”