NBB: Nix Argentinian Biodiesel Rule

STREATOR, Ill. (DTN) -- The National Biodiesel Board is calling for the Environmental Protection Agency to stay its January decision to "streamline" Argentinian biodiesel imports to the United States that would qualify under the Renewable Fuel Standard, pending public review and comment, the NBB said in a news release Tuesday, March 31.

In a petition filed Monday, March 30, with the EPA, NBB cited the "lack of public comment on the EPA decision and little transparency regarding the plans Argentinian producers can use to demonstrate compliance with the RFS."

Biodiesel is a qualifying renewable fuel under the RFS under the D4 biomass-based diesel category, which also includes renewable diesel.

"We have serious questions about how Argentinian producers will certify that their product meets the sustainability requirements under this new approach and whether U.S. producers will be operating under more strict regulations," said Anne Steckel, NBB vice president of federal affairs. "As a result, we have asked the EPA to hold and reconsider its approval to allow a more open process with public comment and discussion."

The NBB is concerned the rule would have a major impact on market share for U.S. producers, believing producers from Argentina would import roughly 600 million gallons to the U.S. this year. That would be 34% of total U.S. supply of biomass-based diesel, which includes production and imports, if supply this year matches 2014's 1.75 billion gallons.

In 2014, biodiesel imports totaled 333 million gallons, a drop of 36% from the 453 million gallons in 2013, according to the Energy Information Administration. Of that total, 121 million gallons was biodiesel, primarily from Indonesia and Argentina.

Argentina's share of U.S. biodiesel imports tumbled 57% from 2013 to 52 million gallons in 2014. Argentina told media outlets earlier this year that they project biodiesel producers would ship 60 million gallons of supply to the U.S. in 2015. NBB thinks that projection is low.

"The U.S. biodiesel industry is in a state of crisis right now as a result of EPA's continued delays in finalizing RFS volumes," NBB said. "An influx of Argentinian biodiesel will only exacerbate the domestic industry's troubles at the worst possible time," Steckel said.

The EPA initially approved the application from Argentina's biofuels association, CARBIO, on Jan. 27.

Typically under the RFS, foreign producers must map and track each batch of feedstock used to produce imported renewable fuels to ensure that it was grown on land that was cleared or cultivated prior to Dec. 19, 2007 -- when the RFS was expanded to include the biomass-based diesel nested category.

The EPA's January decision allows Argentinian biodiesel producers to instead rely on a survey plan being implemented by a third party to show their feedstocks comply with the regulations. The goal of the survey program is to ease the current map and track requirements applicable to planted crops and crop residues grown outside of the U.S. and Canada.

"Many of the soybeans processed into soybean oil in Argentina come from Uruguay, Peru, Brazil, and other countries," said the NBB.

"Given the complex international trade involved and the apparent gaps in the program as outlined in EPA's approval document, the EPA will have little ability to verify the survey plans proposed by Argentinian producers, even with the third-party surveyor's limited reviews," NBB added.

Argentina would be the first country to use a survey approach under the RFS. Canada and the U.S. operate under an aggregate approach in which feedstock is approved so long as the aggregate amount of agricultural land in each country does not grow.

(BM/AG)

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