Turning Soybeans Into Diesel Fuel Is Costing Us Billions (npr.org)

This year, trucks and other heavy-duty motors in America will burn some 3 billion gallons of diesel fuel that was made from soybean oil. They're doing it, though, not because it's cheaper or better, but because they're required to, by law. From a report: The law is the Renewable Fuel Standard, or RFS. For some, especially Midwestern farmers, it's the key to creating clean energy from American soil and sun. For others -- like many economists -- it's a wasteful misuse of resources. And the most wasteful part of the RFS, according to some, is biodiesel. It's different from ethanol, a fuel that's made from corn and mixed into gasoline, also as required by the RFS. In fact, gasoline companies probably would use ethanol even if there were no law requiring it, because ethanol is a useful fuel additive -- at least up to a point. That's not true of biodiesel. "This is an easy one, economically. Biodiesel is very expensive, relative to petroleum diesel," says Scott Irwin, an economist at the University of Illinois, who follows biofuel markets closely. He calculates that the extra cost for biodiesel comes to about $1.80 per gallon right now, meaning that the biofuel law is costing Americans about $5.4 billion a year.

Comments

Limited production

[DrYak]

Stuff made from plants is renewable.

On the other hand stuff made from plants is, well... made from plants.
And there are only so many that you can grow at the same time.

If you produce bio-fuels by finding a new use for waste (e.g.: fermenting *plants waste* into ethanol, as done is some countries), then that's not a problem. In fact it's an advantage, now you can get even more value from the plants that you grow.

If you produce bio-fuels by growing specific plants for that (e.g: I might remember that in the US you tend to do that ?), then your fuel production if going to compete with your food production.
Will you plant crops that you will use to sell food ? Will you plant crops that you will use to produce fuel ?

Bio fuel production in the latter case can have a bad impact on food production, even more so if the bio-fuels are exported for a premium to much richer countries, whereas the already starving population can barely buy enough to feed themselves : the local population won't be able to afford food a higher price to increase the incentive to produce more food, while the other richer countries will be able to pay slightly more money to make sure they'll receive the fuel they crave.