America’s demand for cleaner, better fuels is growing. Washington state recently joined Oregon and California in launching a clean fuels program. New York, Connecticut and Rhode Island have adopted requirements for Bioheat® fuel in heating oil. Airlines around the world are committing to use as much sustainable aviation fuel as they can. And companies large and small are examining every link of their supply chain for ways to reduce carbon. Meeting these demands requires stable policy and market signals.
That’s one reason our trade association is evolving and becoming the Clean Fuels Alliance America. Our new name embraces all the products our members and others are producing to meet America’s need for clean, low-carbon energy – biodiesel, renewable diesel, sustainable aviation, heating, maritime and railroad fuels. Looking at the market signals from these trends, we expect our industry to double in size during this decade.
Over the past two years – throughout the course of the economic emergency caused by the COVID19 pandemic – our industry worked hard to maintain production levels and meet the nation’s transportation needs. The U.S. market for biodiesel and renewable diesel reached 3 billion gallons in 2020 and 2021. Domestic production of the two fuels met about 80% of that market.
Biodiesel and renewable diesel are used in heavy-duty sectors, such as trucking and shipping, that keep supply chains moving and are among the hardest to shift away from carbon-intensive fossil fuels. Our key to sustainability is the use of a wide variety of raw materials, including a number of recycled waste feedstocks, such as used cooking oil and animal fats, in addition to surplus vegetable oils. About half of the feedstock we use in the United States is soybean oil, and our use has been stable and steady over the past two years. As such, domestic clean fuel producers play a key role in balancing the costs that add up for consumers in their monthly food bills.
Farmers grow soybeans primarily as a very high protein animal feed. The meal – which makes up about 80% of the soybean – is also used in baked goods and other food items. America’s soybean farmers have been able to sustainably increase yields to meet the needs of both food and fuel markets. Moreover, farmers need a variety of market opportunities – for both the meal and the oil – to continue to succeed. When soybean farmers receive value for the oil from biofuel producers, they can provide meal to animal producers and bakers at a balanced price.
Growth of the biodiesel and renewable diesel industry is providing a market signal to expand soybean processing capacity in the United States. Traditionally, half of all soybeans grown in the United States – meal and oil – are exported. These new facilities will ensure that U.S. farmers have more markets at home – both food and fuel –for what they grow. The clean fuels industry’s growth will continue to match the sustainable growth in oil seed production and processing.
The Renewable Fuel Standard is one of the most important signals to U.S. clean fuel producers – as well as to farmers and soybean processors. The rule that the Environmental Protection Agency published in December is long overdue. As such, it reflects only market growth that has already been achieved. We are asking EPA to finalize this rule as quickly as possible and get the RFS program back on track to support future growth.
We know that competing industries are asking EPA to further delay and disrupt the RFS rulemaking process, but the agency should resist. Undercutting the clean fuels industry’s growth could impact consumers in multiple, unpredictable ways. By maintaining sustainable growth and timely implementation of the RFS, EPA can support America’s move to cleaner, better fuels.
Donnell Rehagen is CEO of the Clean Fuels Alliance America.
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