Oilseeds can be processed into biodiesel, a diesel fuel substitute that can be utilized in unmodified diesel engines. A previous study indicated that under very specific conditions biodiesel can be processed and can compete with standard diesel fuel when produced in community-based plants. Investment in such plants would generate positive macroeconomic effects in communities where they are located. This preliminary analysis suggests that positive regional impacts are partially offset by a decrease in retail businesses, such as bulk fuel supply firms and local feed dealers within that community. Net permanent job creation in rural communities was found to be slight with the operation of a single 500 000 gallon community-based biodiesel plant; however temporary jobs were increased due to plant construction. Overall, community-based biodiesel plants were beneficial to the local economies in terms of increased wages, increased tax base and the value added to soybeans. More rigorous analyses will be essential to identify the true impacts of biodiesel production, both inside and outside the region in which plants are located. (C) 1996 Elsevier Science Ltd.