WASHINGTON, May 15, 2014-- Biodiesel producers joined a group of Democrat senators at a press conference Wednesday, calling for Congress to restore the biodiesel tax incentive and for the EPA and the Obama administration to rethink its plan to reduce mandated biofuel use under the Renewable Fuels Standard (RFS).
Despite record biodiesel production last year of nearly 1.8 billion gallons, the EPA has proposed holding the biodiesel RFS volume at 1.28 billion gallons this year and next. Overall, the EPA is calling for 15.21 billion gallons of renewable fuel blending this year, down from 18.15 billion mandated in the 2007 law that set up the standard.
The senators said the EPA’s proposal, if left unaltered, could force many biodiesel producers to shut down. Attending the press conference were Senators Heidi Heitkamp of North Dakota, Dick Durbin of Illinois, Maria Cantwell of Washington, Amy Klobuchar and Al Franken of Minnesota, and Joe Donnelly of Indiana.
They backed up their argument with the results of a survey of 54 biodiesel producers conducted by the National Biodiesel Board (NBB) that found nearly 80 percent have scaled back production this year and more than half have shut down a plant. Two-thirds of producers said they have already reduced or anticipate reducing their workforce. NBB says these cutbacks are partly due to the EPA’s proposal for the RFS and Congress’ failure to extend the biodiesel tax incentive.
“Shutting down a facility is a drastic move,” Heitkamp said. “It takes a lot of resources to build that back up.” Heitkamp noted that in February EPA Administrator Gina McCarthy went to North Dakota at her invitation to hear from farmers firsthand how the proposed changes would affect them.
She said she believes EPA will issue a final rule in early June and she is “optimistic there will be an adjustment.”
Bryan Christjansen, general manager at Renewable Energy Group’s refineries in Albert Lea, Minnesota, and Mason City, Iowa, said if the administration chooses to finalize its RFS proposal, “it does not just put domestic fuel production in jeopardy, it harms local economies and billions of dollars of investments.”
The group of producers and senators also pushed for renewal of the $1 a gallon biodiesel tax incentive, which expired on Jan. 1, the third time in five years that Congress allowed it to lapse. The incentive is included in the tax extenders bill currently under consideration in the Senate.
Cantwell—who introduced a bill with Sen. Chuck Grassley, R-Iowa, that would change the biodiesel tax credit from a blender credit to a producer credit— said a tax credit that operates for at least two years without lapses would benefit the U.S. economy by “helping an industry grow” and providing certainty to producers and investors.
Jeff Haas, CEO of General Biodiesel in Seattle, said his company has limited production and reduced shifts, due to the uncertainty surrounding the RFS and the tax credit.
“We are all slowly bleeding dry,” he said. “It’s incredibly difficult to do business.”
Wayne Presby, owner of White Mountain Biodiesel in North Haverhill, New Hampshire, said he invested millions into his business “because a road map was laid out for growth under the RFS for the next decade, particularly in advanced biofuels.” However, he said his expansion plans are delayed and he is operating at a loss to avoid laying off employees.
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