Biodiesel Industry Responds to EPA 2014 RVOs

Joanna Schroeder

The Environmental Protection Agency (EPA) announced its proposed volume requirements under the Renewable Fuel Standard (RFS) today and the biomass-based diesel category was proposed for 1.28 billion gallons, less than what the industry is currently able to produce. 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.

In response, the National Biodiesel Board (NBB) warned that the EPA’s 2014 proposal 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.

nbb-logo“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 today is so surprising and disappointing.”

Steckel continued, “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. 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.”

Amanda Cunningham of Veros Energy, a biodiesel producer in Moundville, Alabama, is among those in the industry whose job is at risk under the proposal. Cunningham and her husband both work at the company, supporting a family of six children.

“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.”

NBB says 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 concluded. “We will continue urging the Administration to improve this rule before it becomes final.”

REG LogoRenewable Energy Group (REG) the country’s largest biodiesel producer, expressed their disappointment as well. “We are disappointed by the proposed numbers that are not consistent with the goals of the EPA, the White House, nor Congress when it created RFS2. Nevertheless, REG’s lower cost multi-feedstock business model, network of biorefineries and terminals, and strong position within the industry should allow us to continue to succeed as the markets inevitably adjust to reach a new equilibrium,” said REG President & CEO Daniel J. Oh.

Oh continued, “The proposed numbers do not reflect the positive results the biodiesel industry has provided in terms of record production levels of advanced biofuels, job creation, rural economic development, energy and food security, and environmental benefits. We will continue to advocate with our industry partners for logical increases in the biomass-based diesel and overall advanced biofuel RVOs through the public comment period. Without such increases in the RVO our Nation will be deprived of present and obvious benefits.”

advance biofuels, Biodiesel, NBB, REG, RFS