Biodiesel

Biodiesel

ASA Positions

  • ASA supports continued implementation of the RFS2 program, and opposes any legislative efforts that would re-open, revise, or repeal the RFS.
  • ASA opposes any waiver of the biomass-based diesel portion of the RFS.
  • The EPA’s proposal to set the Renewable Fuel Standard (RFS) Required Volume Obligation (RVO) for Biomass-based diesel at 1.28 billion gallons for 2014 and 2015 would be a set back to the U.S. biodiesel industry as production this year is expected to reach 1.7 billion gallons.
  • Setting the 2014 and 2015 RVO at a level lower than 2013 production would result in reduced demand for soybean oil, which accounts for about half of all U.S. biodiesel production.
  • The 1.7 billion gallons of biodiesel that has been produced in 2013 will utilize over 6 billion pounds of soybean oil.
  • ASA supports re-authorization and increased mandatory funding for the Biodiesel Fuel Education program in the 2014 Farm Bill.
  • ASA supports negotiation of a bilateral agreement between the EU and U.S. that would establish an aggregate approach for certifying U.S. compliance with the sustainable land use requirements of the Renewable Energy Directive (RED).

National BioDiesel Board Logo

Learn more about biodiesel from the National Biodiesel Board.

#RefuelTheRFS Resource Center
Why #RefuelTheRFS?

The Environmental Protection Agency has released a proposal that would set the Renewable Fuel Standard (RFS) Required Volume Obligation (RVO) for Biomass-based diesel at 1.28 billion gallons for 2014 and 2015. This would be a setback to the U.S. biodiesel industry as production this year is expected to reach 1.7 billion gallons, and setting the 2014 and 2015 RVO at a level lower than 2013 production would be detrimental to the U.S. biodiesel industry and soybean farmers.

Reducing the 2014 and 2015 RVO for Biomass-based diesel below 2013 production levels would result in reduced demand for soybean oil, which accounts for about half of all U.S. biodiesel production. The 1.7 billion gallons of biodiesel that is expected to be produced in 2013 will utilize over 6 billion pounds of soybean oil.

ASA needs your help and the help of all soybean farmers to encourage the EPA to #RefuelTheRFS by setting the 2014 RVO for biomass-based diesel at 1.7 billion gallons. Below is a collection of resources including letters, fact sheets and talking points for you to use as you talk to your elected officials about this critical issue.

Public Comments:

ASA Member Comments to EPA [gview file=”https://soygrowers.com/wp-content/uploads/2013/02/ASA-Biodiesel-RFS-RVO-2014-Individual-Comments-to-EPA.doc”]

Send the above message directly to EPA Administrator Gina McCarthy by clicking here.

Talking Points:

Talking Points on Maintaining Progress in the RFS [gview file=”https://soygrowers.com/wp-content/uploads/2013/02/ASA-Biodiesel-RFS-RVO-2014-Talking-Points.doc”]

News Releases:

ASA Director Cunningham Testifies on Importance of Raising the Proposed Biodiesel RVO – 12/5/13

EPA’s RFS Proposal Goes Backward on Biodiesel – 11/15/15

Testimony:

Testimony from ASA Director Mike Cunningham to EPA [gview file=”https://soygrowers.com/wp-content/uploads/2013/02/ASA-Biodiesel-RFS-RVO-2014-EPA-Hearing.doc”]

Letters:

Letter from the Senate to EPA [gview file=”https://soygrowers.com/wp-content/uploads/2013/02/Biodiesel-RFS-RVO-2014-15-Senate-Letter.pdf”]

Iowa Letter Requesting Hearing [gview file=”https://soygrowers.com/wp-content/uploads/2013/02/Biofuels-RFS-Iowa-Letter-Requesting-Hearing-December-2013.pdf”]

Dear Colleague Letter from Reps. Latham and McIntyre [gview file=”https://soygrowers.com/wp-content/uploads/2013/02/Biodiesel-RFS-House-Letter.pdf”]

Letter from Sens. Murray, Blunt, Franken and Grassley to EPA [gview file=”https://soygrowers.com/wp-content/uploads/2013/02/Biodiesel-RFS-RVO-2014-Biodiesel_Murray-Blunt-Franken-Grassley-Ltr-to-Adminstration.doc”]

Communications from EPA:

EPA’s Original Proposed Rule [gview file=”https://soygrowers.com/wp-content/uploads/2013/02/Biodiesel-RFS-RVO-2014-15-Proposed-Rule.pdf”]

EPA’s Regulatory Announcement [gview file=”https://soygrowers.com/wp-content/uploads/2013/02/Biodiesel-RFS-RVO-2014-15-EPA-Proposal.pdf”]

Issues Background

Tax Incentive

Last year, the biodiesel tax credit was extended through December 31, 2016. Extension of the tax incentive is important to the industry’s continued growth.

Reps. Noem and Pascrell and Sens. Grassley and Cantwell have introduced updated legislation (HR 5240) to extend the biodiesel tax credit for three years (2017-2019) and restructure it to a producer’s tax credit.  Shifting to a producer’s credit saves at least $90 million per year. We need to build the number of cosponsors of the bill to demonstrate broader support to House leaders.

The House and Senate bills would accomplish a critical, cost-saving reform to the tax incentive by switching from a blender’s to a domestic producer’s credit. This shift would maximize the added value of domestic production. Last year alone, some 670 million gallons of imports came to the U.S. and qualified for the tax credit and these imports often receive additional incentives in their country.
Biodiesel production benefits soybean farmers and the livestock industry.  Approximately half of U.S. biodiesel is produced from soybean oil that is a by-product of soybean production, which is driven by demand for protein meal (soybeans are 80% meal and 20% oil).  In addition, rendered animal fat is a significant feedstock for biodiesel and renewable diesel, further benefiting livestock industry partners.

The biodiesel tax incentive has encouraged significant investment to expand the domestic biodiesel industry and help it become price competitive with petroleum diesel.    At this stage, biodiesel requires the tax incentive to be cost competitive with the more mature and entrenched petroleum industry and to be competitive with imported Brazilian sugarcane ethanol to fulfill the overall Advanced Biofuel volume requirements of the RFS.  Biomass-based diesel is the only domestically produced advanced biofuel that is currently commercially available in the U.S. and it provides significant economic, energy security, environmental and health benefits.

Renewable Fuel Standard (RFS)

On May 18th, EPA released the Proposed Rule setting the Renewable Fuel Standard (RFS), Renewable Volume Obligations (RVO), including the volume requirements for biomass-based diesel for 2018 and the total Advanced Biofuels volumes for 2017 and 2018. By law, EPA is supposed to finalize biomass-based diesel volumes 14 months in advance of the applicable year and they are targeting November 2016 to issue a Final Rule with the biomass-based diesel volumes for 2018.

The Proposed Rule calls for 2.1 billion gallons of biomass-based diesel in 2018. ASA is urging that the volume be increased to 2.5 billion gallons. As a point of reference, the biomass-based diesel requirements for 2016 and 2017 are 1.9 billion and 2.0 billion gallons, respectively. The biomass-based diesel utilization in the U.S. was approximately 2.1 billion gallons in 2015 and is expected to exceed that amount in 2016. The U.S. market is already at the levels EPA is proposing for 2018 and the volumes of imports have been increasing the past several years and are expected to continue to grow.

Biodiesel provides multiple energy, economic, and environmental benefits.

  • It provides increasing volumes of a domestically produced, renewable energy source.
  • It provides significant reductions in greenhouse gas emissions resulting in improved air quality.
  • It has expanded markets for farmers and livestock producers and created new jobs and economic growth, particularly in rural America.

Biodiesel achieves this without adverse impacts on food and feed production.  Biodiesel actually has a positive impact on soybean meal supplies.  Processing biodiesel from soybeans uses only the oil, which comprises 20% of the soybean, and leaves the other 80% available as protein-rich soy meal for use as animal feed, thus creating a surplus and bringing down the cost of feed.

Global demand for soy meal protein has resulted in increased soybean production and at the same time soy oil has been displaced from food markets due to the shift away from trans fat. Biodiesel is an important market outlet for soy oil.  Without it, surplus soy oil would be a drag on soybean prices. Increasing the RFS volume requirements for biomass-based diesel helps farmers and rural communities by providing a market for surplus soy oil while also creating jobs, diversifying our fuel supply, and reducing our greenhouse gas emissions.

Download ASA Position Paper on Biodiesel
Soy Action Center

Reach out to your member of Congress on this issue:
Soy Action Center