Biodiesel is booming. It may help the climate, but there’s a big environmental risk

Ed Cinco of Youngstown, Ohio, has a problem. He’s the director of purchasing for Schwebel’s Baking Company and he can’t get enough soybean oil, a key ingredient in the company’s bread and buns. Suppliers won’t even talk to him.

“The only quotes I can get, for 2022, are from the person I currently buy from,” Cinco says. “So I am basically at [that supplier’s] mercy.”

Prices are rocketing upward, from 35 cents per pound a year ago to almost a dollar. Cinco says companies that crush soybeans and extract the oil are sending it elsewhere: “They all want to go to biodiesel.”

Biodiesel is a version of diesel fuel, which is used by trucks and other heavy-duty engines, that’s made from oils extracted from plants, like soybeans or canola, or even animal fat. It’s set for an unprecedented boom in the next few years because of government policies aimed at finding alternatives to fossil fuels, and helping the climate. Those incentives are driving up demand for soybeans and other oilseeds, pushing prices higher and squeezing supply.