Biodiesel industry voices disappointment in RFS proposal

WASHINGTON – The National Biodiesel Board (NBB) has warned that the EPA’s proposal for 2014 volumes under the Renewable Fuel Standard (RFS) would cause plant closures and layoffs in the U.S. biodiesel industry and called on the Obama Administration to recommit to developing American-made Advanced Biofuels.

“The growth in domestic biodiesel production dovetails exactly with President Obama’s statement in July of this year that ‘biofuels are already reducing our dependence on oil, cutting pollution and creating jobs around the country,’” said Anne Steckel, NBB’s vice president of federal affairs. “This is why EPA’s action is so surprising and disappointing.”

“This proposal, if it becomes final, would create a shrinking market, eliminate thousands of jobs and likely cause biodiesel plants to close across the country,” Steckel said “It also sends a terrible signal to investors and entrepreneurs that jeopardizes the future development of biodiesel and other Advanced Biofuels in the United States.”

“This Administration has for years supported strong renewable fuels policies and encouraged investment in this industry,” Steckel added. “The private sector has responded to these policies by meeting or exceeding the Advanced Biofuels requirements in every year of the RFS. The Administration should be celebrating that success and continuing the momentum, not retreating.”

Biodiesel production is on track to set a production record exceeding 1.7 billion gallons this year, using an increasingly diverse mix of feedstocks including recycled cooking oil, agricultural oils and animal fats. The EPA’s proposed rule for next year would set biodiesel volumes at 1.28 billion gallons while shrinking the overall Advanced requirement to 2.2 billion gallons. The biodiesel category is a subset of the overall Advanced category.

Amanda Cunningham of Veros Energy, a biodiesel producer in Moundville, Ala., is among those in the industry whose job is at risk under the proposal.

“If biodiesel volumes are decreased, it has a hard, hard trickle down impact,” Cunningham said. “We would surely have layoffs; layoffs reduce production; reduced production drops the bottom line; and at that point the plant might as well shut down.”

The draft proposal is particularly challenging because excess biodiesel production in 2013 can be carried over for compliance into 2014. As a result, the 1.28 billion gallon proposal could mean an effective market closer to 1 billion gallons – a dramatic reduction from current production.

“Our industry has been running recently at 170 million gallons per month – an annualized rate of 2 billion gallons. This proposal could nearly cut that in half,” Steckel said. “We will continue urging the Administration to improve this rule before it becomes final.”

Industry Stakeholders Advocating For Strong RFS

Dozens of biodiesel stakeholders from across the country are headed to Capitol Hill on Tuesday to support the Renewable Fuel Standard (RFS) and voice strong disappointment with the recent proposal for next year’s renewable fuels volumes.

Among those making the trip was Ben Wootton, a biodiesel producer from Pennsylvania, who said his plant is likely to close under the EPA’s volume proposal announced last week.

“If the EPA freezes the biomass-based diesel target, it would put our company out of business,” said Wootton, president and CEO of Keystone BioFuels of Camp Hill, Pa. “Keystone is just starting to come out of a reorganization plan. The EPA proposed freeze on biomass-based diesel would essentially cut our current market in half and force us to shut our doors. It would be a major step back for the environment and the economy in our state.”

Anne Steckel said more than 100 biodiesel supporters, representing more than two dozen states from California to Iowa to North Carolina, will be making sure their members of Congress understand that this proposal will eliminate jobs and threaten production in their states.

“Our producers are frustrated and disappointed that the Administration, with no explanation, is essentially freezing a growing Advanced Biofuel industry for the next two years at production levels far below where they are today,” Steckel said. “Biodiesel is an RFS success story, and this proposal turns its back on that success and on the producers who have made it happen.”

Biodiesel production is on track to set a production record of approximately 1.7 billion gallons this year, using an increasingly diverse mix of feedstocks including recycled cooking oil, agricultural oils and animal fats. The EPA’s proposed rule for next year would set biodiesel volumes at 1.28 billion gallons while shrinking the overall Advanced requirement to 2.2 billion gallons. The biodiesel category is a subset of the overall Advanced category.

The draft proposal is particularly damaging because it freezes the biodiesel reduction for two years – 2014 and 2015. Additionally, because excess biodiesel production in 2013 can be carried over for compliance into 2014 the 1.28 billion gallon proposal for 2014 could mean an effective market closer to 1 billion gallons – a dramatic reduction from current levels.

Biodiesel is the first and only commercial-scale fuel produced across the U.S. to meet the EPA’s definition as an Advanced Biofuel - meaning the EPA has determined that it reduces greenhouse gas emissions by more than 50 percent when compared with petroleum diesel. Produced in nearly every state in the country, the industry has exceeded RFS requirements in every year of the program, producing more than 1 billion gallons annually since 2011. It is supporting more than 62,000 jobs nationwide.

NBB is the U.S. biodiesel trade association.