ASA supports maintaining the integrity of the Renewable Fuel Standard (RFS) to ensure continued investment in the American biofuels industry.
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ASA supports funding the Biodiesel Fuel Education Program alongside Clean Fuels Alliance America. The Biodiesel Fuel Education Program was established in the 2002 Farm Bill with the goal of stimulating consumption and investment in biodiesel and renewable diesel. Information and outreach activities funded through the Biodiesel Fuel Education Program have raised awareness of the benefits of biodiesel fuel use and complemented incentives Congress provided in 2005 when it enacted the Renewable Fuel Standard and biodiesel tax incentive. The 2018 Farm Bill shifted the Biodiesel Fuel Education Program from mandatory funding, and the program is now subject to annual appropriations. ASA supports funding this program at its authorized $2 million level.
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. While soybean producers face continued uncertainty in export markets, it is important that our domestic markets can succeed. The RFS can create stability for biodiesel producers and blenders through annual renewable volume obligations. The EPA is currently developing renewable volume obligations (RVOs) for 2023 and beyond. The Renewable Fuel Standard as set by Congress only obligated volumes through 2022—now, the EPA must work to establish a new rule to dictate RVOs moving forward. ASA is asking the EPA to maintain its commitment to the biofuels industry by holding its position of gradually increasing biomass-based diesel and advanced biodiesel volumes in the RVO in upcoming years. Through a consent decree with the federal court system, the EPA is obligated to release its 2023 RVO rule by June 14, 2023.
The $1/gallon biodiesel blending tax credit has been an important longtime support for biodiesel industry—offering stability that has lead to additional market development and expansion. The Inflation Reduction Act extended the current biodiesel tax credit through 2024 before converting to a technology-neutral clean energy production tax credit through 2027. When the tax credit is in place at the beginning of the year, the biodiesel industry grows with confidence. The biofuels industry is also a boon for the rural economy–every 100-million-gallon increase in production supports 3,200 U.S. jobs and $780 million in economic opportunity, according to LMC International (2019).
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