WASHINGTON, Jan. 30, 2015 – As the renewable fuels industry waits for the Obama administration to act on the Renewable Fuel Standard, the National Biodiesel Board is speaking out, calling the agency’s lack of action “unacceptable.”
Last year, the Environmental Protection Agency said it would wait until 2015 to announce Renewable Volume Obligations (RVOs) under the RFS for 2014, 2015 and 2016. Now, as the industry waits for certainty, NBB and the American Soybean Association reacted angrily this week when the EPA announced a streamlined importation process for a group of Argentine biodiesel producers. As part of the deal, the South American producers said they would agree to more stringent sustainability standards.
In a conference call with reporters Friday morning, NBB Chief Executive Officer Joe Jobe called the decision on the biodiesel imports and the delays in updating the RFS “absolutely outrageous.”
“In the throes of being three years behind schedule on just doing the basic thing of finalizing the (RFS) rule and growing the volumes as Congress intended and as the law requires,” Jobe said, “they decided to make a non-urgent, discretionary decision without notice or public comment to fast-track more subsidized Argentinian biodiesel into this program.”
The groups are charging that the soybeans used to produce the biodiesel, which will also count under the RFS, may have been grown under weaker sustainability standards and less environmental oversight than is required in the U.S.
“Any claim that the … plan decreases environmental oversight is flatly wrong. The sustainability standards are exactly the same for all parties,” Byron Bunker, director of the Compliance Division in the EPA’s Office of Transportation and Air Quality, said in an e-mail.
EPA said its decision enhanced “existing regulatory oversight requirements” through a “robust” tracking program verified by a third party. Jobe says he needs a better explanation of how the fast-tracked plan would increase sustainability standards.
“This is a group of Argentinian producers that all got together and petitioned the EPA for a specific plan on these standards to fast-track it,” he said. The idea that a group of producers would seek more stringent regulations, “defies common sense,” he said.
When asked why those producers would ask for increased standards, Bunker likened it to hiring a tax professional to take advantage of his or her expertise. Part of the agreement involves the Argentine sustainability standard being approved by a third party, someone Bunker said could help the growers sift through the complex RFS regulations.
“People want certainty and protection that they are complying with the extensive laws, which most common people don’t know or understand, and so they want the protection of the professional tax preparer,” Bunker said. “This is no different for the parties in Argentina.”
Increased amounts of Argentine biodiesel are expected to head toward the U.S. market because of an anti-dumping duty imposed by the European Union in November 2013. NBB believes it will result in 600 million gallons of Argentine biodiesel being shipped to the U.S. annually.
As domestic producers prepare for a flood of Argentine biodiesel, questions remain about the future of the RFS and the industry itself. Anne Steckel, NBB’s vice president of federal affairs, said “dozens” of biodiesel plants have been put out of business because of the shaky biodiesel market with no clear federal mandate. When asked if she had been given any indications on when the 2014 RVOs may be announced, Steckel said the industry needs it “sooner rather than later.”
NBB officials also disputed assertions that since the renewable fuels industry kept producing without an RFS in 2014, the legislation might not be as needed as much as originally thought. Jobe said looking at 2014 biodiesel production numbers as an indication that the RFS is unnecessary misses several points.
“The only reason that our industry and our members kept going was because the EPA strongly signaled that they were going to fix the drastically flawed proposed rule, finalize it in the spring of 2014, and they were going to increase the numbers, so our industry persevered and kept going,” Jobe said. He then reiterated his belief that the EPA could finalize 2014 RVOs right now based on production that actually occurred – 1.75 billion gallons – and called for increases from those figures in 2015 and 2016.
Meanwhile, NBB governing board member Ben Wootton has written a letter to EPA Administrator Gina McCarthy, offering to assist the agency with development of 2014, 2015, and 2016 RVOs, and asking her to reconsider EPA’s decision on the Argentine biodiesel. Wootton is the former CEO of Keystone Biofuels, one of the plants that NBB says was forced to close because of the uncertain market conditions.
“It is important to the survival of the RFS and therefore the survival of our industry that the biomass-based diesel category and total advanced biofuel category be predictably and sustainably grown over time,” he wrote.
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