Biodiesel

Biodiesel

ASA Positions

  • Soybean farmers support efforts to extend the biodiesel tax incentive and shift it from a blender’s to a production credit.
  • The EPA’s final rule on biodiesel is a modest improvement over previous proposals, but still fails to capture the full potential of the domestic biodiesel industry.
  • ASA is opposed to any legislative efforts to repeal or reduce the RFS for biodiesel.
  • We applaud President Trump’s campaign commitments to renewable fuels and the RFS and will work with both the incoming administration as well as the 115th Congress to ensure that the RFS is protected.
  • Biodiesel—half of which comes from soybean oil—is the country’s most prevalent advanced biofuel, and is the first and only EPA-designated Advanced Biofuel to reach 1 billion gallons of annual production. We have met or exceeded our volume requirements each and every year.
  • Soy-based biodiesel uses only the oil portion of the soybean, leaving all of the meal protein available for livestock feed.
  • Biodiesel provides a market for surplus soybean oil, and prevents it from becoming a drag on soybean and soymeal protein production.
  • Biodiesel also increases soy meal protein supplies, which results in lower costs for livestock feed and provides a valuable market for animal fats as a biodiesel feedstock

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

The biodiesel tax credit expired on December 31, 2016. Extension of the tax incentive is important to the industry’s continued growth. ASA supports extension of the biodiesel tax incentive for 2017 and beyond and restructuring from a blender’s credit to a production tax credit.  The Congressional Budget Office (CBO) scores the shift to a producer’s credit as saving $90 million per year relative to the blender’s credit.

This shift would maximize the added value of domestic production. Last year alone, we saw over one billion gallons of biomass-based diesel imports into the U.S. that qualified for the tax credit. These imports often receive additional incentives in their country, providing an unfair competitive advantage.

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 subsidized foreign biofuels 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)

In 2016, EPA set the Renewable Fuel Standard (RFS) annual 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.

The 2016 RVO Final Rule calls for 2.1 billion gallons of biomass-based diesel in 2018 and 4.28 billion gallons of overall Advanced Biofuels in 2017.  Utilization already exceeds the amounts being imposed by EPA and ASA and the National Biodiesel Board supported a biomass-based diesel volume of 2.5 billion gallons for 2018. 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 2.9 billion gallons in 2016. The U.S. market is already above 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:
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