Soy biodiesel plant in Neb. closes

LINCOLN — Nebraska's only commercial-size soybean biodiesel plant has closed, and officials involved in the operation said federal or state incentives might be needed to help get it reopened.

Northeast Nebraska BioDiesel, which had the capacity to produce 5 million gallons of soy biodiesel a year, closed this month in Scribner.

Seven of its 10 employees were laid off, said Bret Brodersen, a Herman, Neb., farmer who was among seven investors in the more-than-$4-million facility.

High soybean prices and low prices for the fuel combined to make it unprofitable for the plant to stay open. Negative publicity for biodiesel, which Brodersen said was undeserved, also cut into sales.

“We've even been producing fuel at a loss to prove the plant works,” he said, “but it just isn't feasible economically to run the thing.”

Brodersen and Robert Byrnes, a Lyons, Neb.-based consultant for the Scribner plant, said the lack of state incentives for using soy biodiesel was a factor.

Brodersen said a bigger factor in the troubles at the Scribner facility was that the public wasn't willing to pay more for soybean-based biodiesel, which he said is a superior, cleaner product than oil-based diesel.

He said the plant's owners hope economic conditions improve so that the plant can reopen next spring. It began producing biodiesel about a year ago.

Construction on another soy biodiesel plant in Nebraska, a $50 million facility in Beatrice, began in 2007 but was never finished. Its owners declared bankruptcy.

In Iowa, which passed incentives for retail sales and distribution of biodiesel in 2006, 13 plants have been built, according to the Iowa Biodiesel Board Web site.

Nationwide, though, biodiesel supplies have outpaced demand, idling some plants.

To help boost the industry, 24 Midwestern and biofuel-friendly senators urged President Barack Obama in August to include mandates for biodiesel use in the new renewable fuel standards being considered in Congress.

Contact the writer:

402-473-9584, paul.hammel@owh.com