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EPA seeks to slash biodiesel … again

Article cover photo
Senator Charles Grassley speaks to a large group of industry supporters in 2013 during a RFS rally in Nevada. This week Grassley gave an impassioned speech on the Senate floor denouncing the action, saying the EPA was not living up to President Donald Trump’s promises. (Photo: Joseph Murphy/Iowa Soybean Association)

By Matthew Wilde, ISA senior writer

Another day, another attack on the Renewable Fuels Standard (RFS) and biodiesel.

At least that’s how advocates feel after the Environmental Protection Agency (EPA) recently acted to cut the biodiesel under the federal RFS program. The agency did the same thing in July.

Despite repeated promises before and after the election by President Donald Trump to protect the RFS, leaders in his administration have done the opposite. Actions that harm Iowa’s farmers, biodiesel plants and economy, according to Grant Kimberley, Iowa Biodiesel Board (IBB) executive director and Iowa Soybean Association (ISA) market development director.

“Here in Iowa, many of us feel like Charlie Brown trying to kick the football as Lucy pulls it away,” Kimberley said. “Many of our biodiesel plants have already spent millions of dollars to increase production based on the promise of a growing RFS … but it is at a standstill.

“This would mean more jobs, more dollars circulating through Iowa communities and more revenue for farmers at a time of low commodity prices,” he continued.

The EPA put out a Notice of Data Availability (NODA) late last month requesting comment on options for reducing 2018 RFS requirements.

The agency asked about the possibility of lowering targets by 315 million gallons for biomass-based biodiesel and 473 million gallons for advance biofuels and total renewable volumes. EPA fears previously set targets aren’t attainable due to the expiration of the federal biodiesel blenders tax credit last year and the reduction in renewable diesel imports from Argentina and Indonesia because of new anti-dumping duties. All which could translate to higher fuel prices, EPA surmises.

In July, the agency proposed reducing the 2019 advanced biofuel mandate, which biodiesel helps fill, by 40 million gallons.

It’s up to farmers and renewable fuel supporters to convince EPA not cut biodiesel mandates and ensure the president honors his commitment to the renewable fuels industry and rural America, biodiesel leaders say.

Taking action

The National Biodiesel Board (NBB) put out a call to action Wednesday during a Federal Affairs Town Hall meeting. Leaders urged producers and industry officials to contact lawmakers and the EPA to make their voices heard.

Doug Whitehead, NBB chief operating officer, said concerns about production and price are unfounded. The tax credit has come and gone throughout the years and the industry has always met its obligations.

“EPA Administrator (Scott) Pruitt has committed to hear from us,” Whitehead said. “He hasn’t heard the true numbers about production and capacity. It’s time to turn up the heat.”

NBB officials suggest supporters contact the EPA by phone and/or email. Visit www.biodiesel.org or www.nbb.org to find out more. Click on the “Fueling Action” icon to submit a pre-drafted letter or personalized comments to the agency by Oct. 19.

Facts favor biodiesel

More than 1.8 billion gallons of biodiesel and renewable diesel were produced in the United States last year. The record amount was far below capacity of 4.24 billion gallons, industry officials say. Feedstocks availability isn’t an issue.

Iowa’s 12 biodiesel plants produced a record 305 million gallons in 2016. Capacity is about 400 million gallons, considering expansion projects recently completed or underway.

If EPA lowers biodiesel volumes, Kimberley said that will likely mean a 1.8 billion-pound reduction in soybean oil demand.

“That would translate into lower crush margins for processors and lower soybean futures and cash prices for farmers at a time when breaking even is difficult,” Kimberley said. “That’s why it’s critical farmers find time during harvest to act.”

John Heisdorffer plans put in his 2-cents. The Keota farmer is president-elect of the American Soybean Association and a board member of the Iowa Renewable Energy plant in Washington.

The 30-million-gallon facility is operating under capacity, Heisdorffer said.

“It’s ridiculous what the EPA is doing,” he said. “It seems we get over one thing and another comes along. We’re not operating at capacity nationally and in Iowa. Just let us run.

“I’m sure the petroleum industry is also working to upset the RFS numbers,” he added.

A former American Petroleum Institute lawyer now working for the EPA reportedly drafted the latest NODA.

Iowa lawmakers react

Several of Iowa’s congressional delegation have spoken out against the latest proposed cuts.

Sen. Chuck Grassley gave an impassioned speech on the Senate floor denouncing the action, saying the EPA was not living up to President Donald Trump’s promises — before and after the election — to support biofuels and the RFS. Sen. Joni Ernst grilled EPA employee nominees this week during a senate hearing about the importance of the law.

“It’s outrageous that the EPA would change course and propose a reduction in renewable fuel volumes,” Grassley said in a statement. “This seems like a bait-and-switch from the EPA’s prior proposal and from assurances from the president himself and Cabinet secretaries in my office prior to confirmation for their strong support of renewable fuels.”

Grassley will hold a press conference Tuesday at the REG biodiesel plant in Newton to discuss the matter.

For permission to republish articles or to request high-res photos contact Aaron Putze at aputze@iasoybeans.com.

©2017 Iowa Soybean Association On-Farm Network®. All rights reserved. On-Farm Network® is a registered trademark of the Iowa Soybean Association, Ankeny, IA.Portions of some On-Farm Network trials are paid for in total or in part by the soybean checkoff.

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August 2017 Contact Ann Clinton for past publications.