The credit began in 2005 as a way to help farmers, reduce petroleum imports and support the market for biodiesel.
In September, 95 U.S. biodiesel plants produced 142 million gallons of the fuel, down from 164 million gallons a year earlier, according to the Energy Information Administration. (Source: KDAL, Reuters, Various Media, 17 Dec., 2019)
More Low-Carbon Energy News Biodiese, Biodiesel Tax Credit,
The 2019 U.S. Biodiesel Plant Production Capacity Report shows 102 operating biodiesel plants with 2.6 billion gpy in biodiesel production capacity, or 167,000 bpd. More than half of the nation's biodiesel production capacity is in the Midwest region, led by Iowa, Missouri, and Illinois. Of the top 15 biodiesel-producing states, 9 are located in the Midwest.
U.S.biodiesel production topped 1.8 billion gallons (119,000 bpd) in 2018, implying a 72 pct utilization rate based on the nameplate capacity level recorded at the beginning of 2018.
In its latest Short-Term Energy Outlook (STEO), EIA forecasts that U.S. production of biodiesel will reach about 2.0 billion gallons (128,000 bpd) in 2019, resulting in 77 pct utilization of reported nameplate capacity as of January 1, 2019.
Respondents report the biodiesel production capacity data to EIA on Form EIA-22M, Monthly Biodiesel Production Survey, and EIA publishes the data in the Monthly Biodiesel Production Report. All entities that produce biodiesel that meets ASTM D 6751-07B specifications and is used for commercial purposes within the United States submit Form EIA-22M. Additional data collected on Form EIA-22M include production, sales, stock changes, and feed stock inputs to production. (Source: US EIA Release, Sept., 2019) Contact: US EIA, www.eia.gov/petroleum/ethanolcapacity
More Low-Carbon Energy News Biodiesel, U.S. Energy Information Administration,
"We are writing to express dismay at your recent decision to grant 31 waivers from the Renewable Fuel Standard (RFS) program. Plainly stated, that decision is putting U.S.biodiesel producers out of business and worsening the year's outlook for soy farmers. And while you have expressed concern to save small petroleum refineries, you should also understand that small U.S. biodiesel producers need a positive signal.
"Within a week of your decision on the 31 waivers, one U.S. biodiesel producer announced plans to close three plants -- in Pennsylvania, Georgia, and Mississippi. Other producers have announced closings and laid off workers. More than 200 million gallons of domestic biodiesel production has been idled this year, due to instability in federal policy. We anticipate that additional facilities will close over the next several months if you do not take quick action to restore RFS volumes for biodiesel and renewable diesel.
"Every small refinery waiver issued by the EPA has the potential to put a U.S.biodiesel producer out of business. A small oil refiner processing 75,000 barrels of oil per day can produce nearly 1 billion gallons of fuel in a year. The RFS program requires that oil refiner blend about 20 million gallons of biodiesel or renewable diesel during the year -- a very small fraction of overall fuel production. However, there are dozens of biodiesel producers who produce 20 million gallons of fuel or less each year; three-fifths of U.S. producers are small, non-integrated facilities.
Small refinery waivers destroy demand for all biofuels across the board, with a significant impact on domestic biodiesel and renewable diesel producers. According to University of Illinois economist Scott Irwin, the exemptions especially harm biodiesel and renewable diesel producers because of the way the RFS is constructed. The 1.4 billion gallons of renewable fuel eliminated from the 2018 RFS through the 31 waivers includes hundreds of millions of gallons of biodiesel and renewable diesel in the biomass-based diesel, advanced and overall volumes.
"The small refinery exemptions are compounding the policy headwinds our industry is facing. Biodiesel producers have waited more than 20 months for Congress to address expired tax incentives. Additionally, your U.S. Department of Commerce is proposing to virtually eliminate countervailing duties on unfairly subsidized Argentine biodiesel. Those duties were put in place to counteract years' worth of unfair trade practices by Argentina. Soy farmers have faced closed markets, depressed crop prices, and weather-related challenges. Those forces have reduced soy planting by 15 percent for the current marketing year. Biodiesel is a value-added market driver for America's soybeans, at a time when markets have been shut or diminished.
"The biodiesel industry continues to rely on the RFS to incentivize growth. Biodiesel and renewable diesel can be used in any existing diesel engine without special equipment for blending or dispensing. Producers therefore rely on a positive signal and support from federal programs to continue opening the transportation market to higher volumes.
"Biodiesel producers and soy farmers rely on the RFS program. Growth in the biodiesel market is the only way to keep domestic producers operating and protect U.S. workers' jobs. Unfortunately, EPA is proposing zero growth for biomass-based diesel. We have asked the agency to do two things: first, properly account for the small refinery exemptions handed out over the past few years and going forward; and second, provide growth in the biomass-based diesel market for 2020 and 2021.
"We ask that you continue to support the RFS and save small biodiesel producers. (signed) National Biodiesel Board (NBB)" (Source: NBB, 9 Sept., 2019) Contact: NBB, Donnell Rehagen, CEO, Kurt Kovarik, VP Federal Affairs, (800) 841-5849, www.biodiesel.org
More Low-Carbon Energy News NBB, Biodiesel, RFS,
In July, EPA announced biomass-based diesel and advanced biofuels volumes for 2021 will remain stagnant but again failed to account for the significant gallons lost because of SRE, which makes the proposed volume, in effect, a reduction for biofuels.
The waivers announced Friday evening combined with those issued for 2016 and 2017 RFS volumes brings the total number to more than 80 retroactive waivers, which significantly reduces biodiesel demand and results in billions of dollars in economic harm to the U.S. biodiesel industry, including soybean farmers.
Kentucky soybean grower and American Soybean Association (ASA) president Davie Stephens responded to the latest round saying "Of course ASA is unhappy. These exemptions undermine President Trump's pledge to support the RFS and undermine the Administration's efforts to support farmers who are already bearing the brunt of trade disruptions. EPA's decision is another blow to yet another market for soybean farmers." (Source: American Soybean Association, Daily American, Various Media, 26 Aug., 2019) Contact: American Soybean Association, Dave Stephens, Pres., (314) 576-1770, www.soygrowers.com
More Low-Carbon Energy News EPA, "Hardship" Waivers, American Soybean Association,
"Congress passed the Renewable Fuel Standard (RFS) back in 2007, signed into law by George W. Bush -- a lifelong oil and gas guy. The law was passed to encourage investment in advanced biofuels like biodiesel, renewable diesel and renewable jet fuel. Biodiesel producers responded, making the investments and building an industry that today produces more than 2 billion gallons of transportation fuel each year. This market also provides added value to feedstocks such as soybean oil, used restaurant oil and animal fats.
"The oil industry feverishly insists that the ethanol industry isn't harmed by small refinery exemptions because production has grown. But what about biodiesel? They never mention us because they know that small refinery exemptions disproportionately affect biodiesel because of the way the RFS is constructed.
"We have said again and again -- biodiesel is very different from ethanol. The president (Trump) was instrumental in clearing the path for higher blends of ethanol year-round when he lifted the RVP waiver this summer, which we were supportive of. He and his EPA administrator have mentioned E15 when they have spoken about what they believe to be the minor impact of exempting RFS gallons. It's as though they think we are dumb enough to not understand that they are giving with one hand but taking away with the other.
"Now, back to biodiesel. E15 does nothing to expand demand for biodiesel. Ethanol is not biodiesel. In fact, the RFS recognized this by establishing its own category for biodiesel, separate from ethanol, called biomass-based diesel. Policymakers at the time recognized the need to segment biodiesel and renewable diesel within the bigger RFS pool so that growth in those products could be differentiated in the overall program and we would see advancements of biofuels in both the gasoline and diesel sector.
"Fast forward to 2019 and we now have an EPA that, two months ago, proposed a draft rule to hold the biomass-based diesel category flat for 2020, keeping it at 2.43 billion gallons for the second year in a row and then, just last week, the same EPA grants nearly one-half billion gallons of biomass-based diesel waivers. To highlight the hypocrisy in this action, while filing the draft rule two months ago, the EPA documented, in writing, the fact that they expected to grant zero (that's zero as in none, zilch, nada) gallons of small refinery waivers in 2020. And we're supposed to understand and accept that move?
"Biodiesel and renewable diesel year after year fill more than 90 percent of the RFS volumes reserved for advanced biofuels. But EPA complains that advanced biofuels have not materialized quickly enough to meet the goals of the RFS. Now -- as seen last week -- the agency is holding its thumb on the industry and blocking growth. Not only blocking growth, but helping to reduce demand through small refinery exemptions.
"As the agency continues to hand them out to every refiner that asks, the damage could reach $7.7 billion or 2.54 billion gallons, according to Scott Irwin, an agricultural economist from the University of Illinois. A 'small' oil refinery, by RFS definition -- one that processes 75,000 bpd of oil and produces nearly a billion gallons of fuel a year -- would have an RFS obligation to use just 20 million gallons of biodiesel or renewable diesel. Many U.S. biodiesel producers are smaller than that -- just one small refinery exemption would eliminate their entire market. And the EPA granted 31 of them.
"President Trump vowed to protect and defend American farmers. In fact, he calls them patriots. But his actions will put the biodiesel producers those same farmers depend on for their market, out of business. It's already happening, and it's having a devastating impact on rural communities across the nation.
"President Trump and EPA Administrator Wheeler should clearly know what this means to the workers, producers, farmers and investors in the biodiesel and renewable diesel industry -- their new round of unwarranted RFS exemptions just destroyed jobs and a valuable marketplace for hardworking Americans, including those patriotic soybean farmers who Trump has called on to be his willing allies in the trade dispute with China. If this is how the EPA administrator treats the president’s allies, I'd hate to see how he treats his enemies.
(Source: NBB, 15 Aug., 2019) Contact: NBB, Donnell Rehagen, CEO, Kurt Kovarik, VP Federal Affairs, (800) 841-5849, www.biodiesel.org
More Low-Carbon Energy News NBB, Biodiesel,
"Biodiesel producers are already shutting down facilities and laying off workers, due to loss of demand. The ongoing demand destruction will undercut the industry's investments and choke off markets for surplus agricultural oils, adding to the economic hardship that farmers are facing. The Trump administration's action represents a fundamental betrayal of previous promises to farmers and the agricultural economy." (Source: National Biodiesel Board, 10 Aug., 2019) Contact: NBB,
Kurt Kovarik, VP Federal Affairs, (800) 841-5849, www.biodiesel.org
More Low-Carbon Energy News National Biodiesel Board, EPA, RFS,
"America's farmers and rural communities are facing a mounting economic threat. With your leadership, Congress can help mitigate the crisis by taking immediate action on a policy that enjoys bipartisan, bicameral support. We are writing today to ask you to renew and extend the biodiesel tax incentive at the earliest opportunity.
"Income for America's farmers is falling, and the impact is beginning to be felt in other sectors of the rural economy. Biodiesel production adds value to oil seed crops and recycled oils, providing one bright spot for the agriculture sector. Congress can take rapid action to renew the biodiesel tax incentive -- a policy that enjoys broad bipartisan support -- to help U.S. biodiesel producers continue growing."
The letters group include the Agricultural Retailers Association, American Farm Bureau Federation, American Soybean Association, CoBank, Corn Refiners Association, Farm Credit Council, National Biodiesel Board, National Council of Farmer Cooperatives, National Farmers Union, National Oilseed Processors Association, National Renderers Association, National Sorghum Producers, and U.S. Canola Association.
A copy of the letter is available for download HERE. (Source: National Biodiesel Board , KTIC, 22 May, 2019) Contact: National Biodiesel Board,
Kurt Kovarik, VP Federal Affairs, (800) 841-5849, www.biodiesel.org
More Low-Carbon Energy News Biodiesel, National Biodiesel Board, NBB,
The IRFA credits the increase to record ethanol exports, refinery exemptions to the Renewable Fuel Standard, and the trade dispute with China. Iowa's ethanol is projected to make up 27 pct of total U-S ethanol production.
On Jan. 4 we reported the Iowa's 12 biodiesel plants produced a record-breaking 365 million gallons of biodiesel in 2018. The record production is due in part to the plummeting level of biodiesel imports following a verdict against Argentina and Indonesia for illegally subsidizing imports to the U.S.
According to the IRFA, Iowa's biodiesel production is expected to make up nearly 20 pct of total U.S. production for 2018. The IRFA also emphasized that the state could do even more if the Renewable Fuel Standard (RFS) level for biodiesel was set to at least mirror projected U.S. biodiesel consumption and not undermined by small-refinery exemptions. (Source: Iowa Renewable Fuels Association, Jan., 2019) Contact: Iowa Renewable Fuels Association, Monte Shaw, Exec. Dir., (515) 252-6249, firstname.lastname@example.org, http://iowarfa.org
More Low-Carbon Energy News Ethanol, Biodiesel, Ethanol, Iowa Renewable Fuels Association,
According to the IRFA, Iowa's biodiesel production is expected to make up nearly 20 pct of total U.S. production for 2018. The IRFA Shaw also emphasized that the state could do even more if the Renewable Fuel Standard (RFS) level for biodiesel was set to at least mirror projected U.S. biodiesel consumption and not undermined by small-refinery exemptions.
Compared to 2017, there was a shift in feedstock usage across the state toward more soybean oil. Soybean oil increased its market share to nearly 81 pct while animal fat usage declined from 11 pct to nearly 5 pct. Corn oil continued to make up about 10 pct of feedstock while used cooking oil (UCO)increased to about 4 percent. (Source: Iowa Renewable Fuels Association, KMA Land, 3 Jan., 2019) Contact: Iowa Renewable Fuels Association, Monte Shaw, Exec. Dir., (515) 252-6249, email@example.com, http://iowarfa.org
More Low-Carbon Energy News Iowa Renewable Fuels Association, Biodiesel,
The latest duties come just two weeks after a budget deal in the U.S. Congress reinstated a $1 per gallon biodiesel tax credit, which is expected to improve profitability for domestic producers.
(Source: U.S. Commerce Department, MecoPress, 23 Feb., 2018) Contact: U.S. Department of Commerce, www.commerce.gov Department
More Low-Carbon Energy News U.S. Biodiesel, Biodiesel Duties, Commerce Department ,
The letter said the "biodiesel blenders' tax credit has worked successfully to build a robust biodiesel and renewable diesel industry that produced twice the volumes mandated under the Renewable Fuel Standard (RFS). Supporters of the blenders' tax credit are concerned that changing the tax credit to a producer only benefit will limit supply and lead to increase the cost of diesel fuel and heating oil."
The biodiesel blenders' tax credit expired at the end of 2016. Previously, Congress has extended the credit year-by-year as part of a "tax extenders" package, and in some years applied it retroactively, as was the case for 2016. While unlikely that this or any other tax extenders will be included in the House tax package to be released this week, the Senate may consider including the biodiesel tax credit in its tax package. However, some senators representing U.S. biodiesel producers are working to change the tax credit from a blenders' credit to a producers' credit. (Source: NACS, 2 Nov., 2017)Contact: NATSO, Lisa Mullings, Pres., CEO, David Fialkov, VP Gov. Affairs, (703) 549-2100, ; NACS, www.nacsonline.com; Advanced Biofuels Association, Michael McAdams, Pres., www.advancedbiofuelsassociation.com
More Low-Carbon Energy News Biodiesel Tax Credit, Advanced Biofuels Association, NACS,
Grassley also spoke about his American Renewable Fuel and Job Creation Act of 2017 and continuing effort to re-instate the federal biodiesel tax credit, which lapsed at the end of 2016, and reform the incentive to focus it strictly on domestically produced biodiesel.
"A credit for domestic production will ensure we're incentivizing the domestic industry, rather than subsidizing imported biodiesel. We should not provide a U.S. taxpayer benefit to imported biofuels. A producer credit will do what Congress intended -- incentivize investment in U.S. biodiesel production," the Senator said.
(Source: Renewable Energy Group, Inc., Globe NewsWire, 10 Oct., 2017) Contact: REGI, Brad Albin, VP Manufacturing,
(703) 822-1972, firstname.lastname@example.org, www.rwegi.com; Senator Chuck Grassley, 202) 224-3744, www.grassley.senate.gov/contact
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According to AGP VP of Corporate Relations and Government Affairs Matt Caswell, the EPA is trying to justify their proposal by the mistaken belief the U.S. biodiesel industry lacks the production capacity to provide 2.1 billion gpy of biodiesel to the market.
AGP is a major U.S. soybean processor and is owned by 148 local and regional cooperatives representing over 250,000 farmer producers across the United States. (Source: Ag Processing Incorporated, WNAX Radio, 9 Oct., 2017) Contact: Ag Processing Incorporated,Matt Caswell, VP Corporate Affairs, Craig Pietig, (402)-492-3322, www.agp.com
More Low-Carbon Energy News Ag Processing, Biodiesel RFS,
Imports, mostly from Argentina, made up nearly half of U.S. biodiesel consumption of 2 billion gallons in 2016. Argentinian biodiesel imports were valued at $1.2 billion, according to the U.S. Commerce Department data.
The increased duty on imports would likely boost U.S. prices and encourage U.S. domestic biofuel production. (Source: Successful Farming, US Dept. of Commerce, Reuters, 23 Aug., 2017)
More Low-Carbon Energy News Biofuel, Biodiesel,
February 2017 totals included 37 million gallons sold as B-100 and an additional 46 million gallons of B-100 sold in biodiesel blends with petroleum diesel fuel. There were a total of 736 million pounds of feedstocks used to produce biodiesel in February 2017. Soybean oil remained the largest biodiesel feedstock during February 2017 with 369 million pounds consumed.
The Monthly Biodiesel Production Report provides data on operations of the U.S. biodiesel industry as part of EIA's response to section 1508 of the Energy Policy Act of 2005.
“Today’s case provides a strong opportunity to defend higher advanced-biofuel volumes. Clear market signals from more robust EPA requirements will encourage continued growth in America’s advanced biofuel—biodiesel,” said Anne Steckel, Vice President of Federal Affairs at NBB.
Various groups are seeking to force changes to the fuel volumes required for compliance in the years 2014 – 2016 and the biomass-based diesel volume for 2017. Several cases were consolidated into the one considered today. The NBB supported EPA on the cellulosic and biomass-based diesel volume arguments by pointing to D.C. Circuit Court precedent that affirms EPA’s authority and lack of harm to obligated parties. While joining various ethanol groups on arguments related to EPA’s general waiver authority, the NBB also raised numerous arguments related to EPA’s advanced-biofuel volumes.
Historically, EPA has not deviated from the advanced-biofuel volumes required by the RFS statute, even if the agency lowered other kinds of fuels’ volumes (such as cellulosic). For the first time, EPA reduced the volumes required for advanced biofuel for 2014 – 2016. This set the advanced-biofuels industry back, because U.S. biodiesel responds to increased demand with increased production. The NBB argues that EPA exceeded its authority and failed to move the advanced-biofuel program forward as Congress envisioned.
Congress sought to increase production and stimulate investment—not simply follow the market and maintain the status quo. Reducing the required volumes based on demand-side considerations undermines continued investment and the innovation that has successfully diversified feedstocks, increased efficiencies and lowered costs.
The RFS—a bipartisan policy passed in 2005 and signed into law by President George W. Bush—requires increasing volumes of renewable fuels to be blended into the U.S. fuel stream. The law is divided into two broad categories: conventional biofuels, which must reduce greenhouse gas emissions by at least 20%, and advanced biofuels, which must have a 50% reduction. Biodiesel is the first advanced biofuel to reach commercial-scale production nationwide and has made up the vast majority of advanced biofuel production under the RFS to date.
NBB also has a trade case pending before the U.S. Department of Commerce and the International Trade Commission on biodiesel imports. (Source: NBB, Fuel Marketer News, April, 2017)
Grassley's legislation comes on the heels of the U.S. biodiesel industry challenging Argentina and Indonesia for flooding the U.S. market with their biodiesel. (Source: WNAX, 26 April, 2017) Contact: Senator Chuck Grassley, 202) 224-3744, www.grassley.senate.gov/contact
More Low-Carbon Energy News Biodiesel, Biodiesel Tax,
According to the NBB, Argentine and Indonesian companies are violating trade laws by flooding the U.S. market with dumped and subsidized biodiesel, and are injuring American manufacturers and workers.
Biodiesel imports from Argentina and Indonesia surged by 464 pct from 2014 to 2016 and taken 18.3 pct of market share from U.S. manufacturers.
According to the Commerce Department there is evidence that dumping margins could be as high as 26.54 pct for Argentina and 28.11 pct for Indonesia.
(Source: NBB, April, 2017) Contact: NBB, (573) 635-7913, email@example.com, www.nbb.org
More Low-Carbon Energy News Biodiesel, National Biodiesel Board , Biodiesel,
January 2015 biodiesel production reached only 73 million gallons, making it the lowest producing month since the start of 2015. December and October 2016 were the joint highest producing months with both peaking at 144 million gallons. (Source: US EIA, Various Media, April, 2017)
More Low-Carbon Energy News US Energy Information Administration, Biodiesel ,