Biodiesel RFS Support

OMAHA (DTN) -- A bipartisan group of 32 U.S. senators began pressing the panic button Monday, pushing the U.S. Environmental Protection Agency to finalize Renewable Fuel Standard volumes before there is permanent damage to a biodiesel industry that produces the only commercial volumes of advanced biofuels.

RFS volumes for 2014, 2015 and 2016 are said to be on track for release this spring, according to EPA, but there are concerns it will be too late for the U.S. biodiesel industry, which is already faced with ongoing contraction after a handful of record-producing years.

In a letter to EPA Administrator Gina McCarthy Monday, a group of senators including Charles Grassley, R-Iowa; Deb Fischer, R-Neb.; Richard Durbin, D-Ill.; Maria Cantwell, D-Wash.; Roy Blunt, R-Mo.; Debbie Stabenow, D-Mich.; among others, said EPA hasn't followed the law.

"...It is exceeding the goals that Congress envisioned when it created the growth, and under the law, its volumes are to be promulgated independently of the other fuel categories," the letter said. "Indeed, the timetables for biodiesel are unique under the RFS. In creating the program, Congress directed the EPA to establish the biomass-based diesel volume at least 14 months before the applicable year in which the requirement takes effect.

"This is because unlike other fuel categories under the RFS, the law did not include a pre-determined volume schedule for biomass-based diesel. Instead, it directed the EPA to establish annual volumes based on industry capacity, feedstock availability, and other factors.

"EPA's recent actions have neither reflected industry capacity nor biodiesel's separate treatment under the RFS. The recent delay has only compounded the effects from the November 2013 RFS proposed rule, which did not adequately reflect biodiesel production levels. These actions continue to create tremendous uncertainty and hardship for the U.S. biodiesel industry and its thousands of employees."

Ben Evans, director of public affairs and federal communications for the National Biodiesel Board, said the delay already has permanently hurt segments of the industry.

"It's not as if the industry would just completely go away," he said. "What we are seeing is just contraction. Clearly, for some in the industry, it already is too late. Some companies have already shut down and will not return. But many more plants are just hanging on with minimal production, hoping for a final decision from the EPA that will bring the market back. It's difficult to say how much longer they can do that."

Evans said smaller producers are hit harder than larger companies because their "balance sheets are smaller. But everyone is being hurt and we will see many, many more companies close their doors permanently in the coming months without some resolution of the RFS uncertainty."

In the letter to McCarthy, the senators pressed EPA to expedite approval of the final RFS volumes.

"Plants have reduced production and some have been forced to shut down, resulting in layoffs and lost economic productivity," the letter said. "We urge you to get biodiesel back on schedule under the statutorily prescribed renewable volume obligations process and quickly issue volumes for 2014 at the actual 2014 production numbers. We also hope you move forward on the 2015 and 2016 biodiesel volumes in a timely manner, ensuring that these delays do not become the norm for the industry.

"Furthermore, volumes for 2015 and beyond must be increased to take into account EPA's recent decision to allow imports from Argentinean renewable fuel producers to participate in the RFS and to prevent displacement of domestic production. Like many industries, the biodiesel industry requires certainty in order to plan for production in the next year. As such, the administration risks causing further disinvestment and lost jobs if these decisions are not made in a timely manner."

Read the full letter here, http://tinyurl.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow Todd on Twitter @toddneeleyDTN

(AG/BAS)

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