The National Biodiesel Board (NBB) filed a petition with the Environmental Protection Agency (EPA) on Monday, calling for the agency to stay its recent decision to approve a new survey method for Argentinian biodiesel imports to the U.S. under the Renewable Fuel Standard (RFS). In the Petition for Reconsideration and Request for Administrative Stay, NBB asks that the EPA withhold implementing the decision and reconsider the application with more opportunity for public comment and review.

The petition is one of several strategies NBB is pursuing, with support and assistance from ASA and the U.S. soybean industry, to prevent or mitigate the threat of Argentinian biodiesel flooding the U.S. market. NBB and ASA are also pressing the EPA to take into account the potential for sharply increased Argentinian biodiesel imports in future years’ volume rulemakings.

ASA has previously written to EPA to express our views and concerns regarding imports of Argentine biodiesel, particularly on the process, timing, and opportunity for public review and input into the EPA review of the CARBIO proposal. ASA expressed great frustration and disappointment that EPA granted the Argentine approval when they are years overdue on their statutory requirement to establish annual volume requirements for biodiesel. The uncertainty that has resulted from the lack of volume requirements has hampered the U.S. biodiesel industry and addressing this issue should be the top RFS priority for EPA.

In a press statement regarding the petition, NBB Vice President of Federal Affairs Anne Steckel said:

“We have serious questions about how Argentinian producers will certify that their product meets the sustainability requirements under this new approach and whether U.S. producers will be operating under more strict regulations. As a result, we have asked the EPA to revoke its approval to reconsider the petition under a more open process with public comment and discussion.

Given the circumstances, we think this is a very reasonable request,” Steckel added. “The U.S. biodiesel industry is in a state of crisis right now as a result of EPA’s continued delays in finalizing RFS volumes. An influx of Argentinian biodiesel will only exacerbate the domestic industry’s troubles at the worst possible time.”

The EPA initially approved the application from Argentina’s biofuels association, CARBIO, on Jan. 27.

Typically under the RFS, foreign producers must map and track each batch of feedstock used to produce imported renewable fuels to ensure that it was grown on land that was cleared or cultivated prior to Dec. 19, 2007 – when the RFS was established.

The EPA’s January decision allows Argentinian biodiesel producers to instead rely on a survey plan being implemented by a third party to show their feedstocks comply with the regulations. The goal of the survey program is to ease the current map and track requirements applicable to planted crops and crop residues grown outside of the United States and Canada, resulting in a program that seems far less stringent and more difficult to verify.

Because the EPA did not provide an open process when it considered the application, the limited information provided in EPA’s approval document raises significant questions about whether soybean-oil biodiesel being imported from Argentina meets the renewable biomass requirement under the regulation. Many of the soybeans processed into soybean oil in Argentina come from Uruguay, Peru, Brazil and other countries. Given the complex international trade involved and the apparent gaps in the program as outlined in EPA’s approval document, the EPA will have little ability to verify the survey plans proposed by Argentinian producers, even with the third-party surveyor’s limited reviews. Argentina would be the first country to use a survey approach under the RFS. Canada and the U.S. operate under an aggregate approach in which feedstock is approved so long as the aggregate amount of agricultural land in each country does not grow.

In addition to the new U.S. survey rules, Argentina supports its domestic biodiesel program with a cost-distorting “Differential Export Tax” program that allows Argentinian biodiesel to undercut domestic prices.