US Oilseed Growers Protest EU Biofuel Requirement

John Davis

Oilseed growers, led by the American Soybean Association (ASA), have raised concerns with U.S. Department of Agriculture (USDA) Secretary Tom Vilsack and U.S. Trade Representative (USTR) Ron Kirk over the European Union’s (EU) Renewable Energy Directive (RED), particularly the part that is keeping American soybeans out of Europe for biofuel production.

The ASA is asking
to meet with Vilsack’s and Kirk’s respective agencies to consider options for responding to the trade barriers:

ASA believes a highly coordinated effort is needed to identify and respond to the immediate, as well as longer-term, market threats resulting from RED implementation. “Trade reports indicate that, since the RED was implemented by Germany on January 1, 2011, U.S. soybean exports to that country have declined significantly, and soybean oil processed in the EU from U.S. soybeans is being re-exported out of the EU,” said ASA First Vice President Steve Wellman, a soybean producer from Syracuse, Neb. “As other Member States transpose the RED into national law, ASA anticipates the economic viability of exporting U.S. soybeans to the EU will be further eroded, and that a $1 billion market could be lost.”

In order for biofuels to qualify for EU tax credits and use mandates, the RED requires that biofuel feedstocks must reduce greenhouse gas emissions by a minimum of 35 percent by 2013, and by 50 percent by 2017, compared to petroleum diesel. Based on Brazilian production and transportation data, the EU set the greenhouse gas savings default value for soy biodiesel at 31 percent, short of the 35 percent reduction required. This disqualifies soy as a feedstock for biodiesel. EU-grown rapeseed however passed with a 38 percent value. Since virtually all of the soybean oil processed from U.S. soybeans in the EU is used in biodiesel production, disqualification jeopardizes $1 billion in annual sales of soybeans to EU markets.

The ASA cites a study funded by the United Soybean Board (USB) that shows American soy biodiesel actually reduces greenhouse gas emission by up to 52 percent.

Biodiesel, biofuels, Government, International, Soybeans