Responding to the US Environmental Protection Agency (EPA) announcement on August 9, 2019, regarding the 2018 small refineries waivers, the National Biodiesel Board (NBB) condemned EPA's announcement as a "giveaway to the oil industry". NBB warns that the "demand destruction" from the 31 refinery exemptions is likely to put American biodiesel producers out of business.
The National Biodiesel Board (NBB) slammed the US Environmental Protection Agency’s granting of 31 retroactive small refinery exemptions for 2018 on August 9, 2019, as a “fundamental failure” to uphold the Renewable Fuel Standard (RFS).
Less than two months after vowing to always protect and defend American farmers, President Trump is bowing to oil industry pressure and allowing his EPA to dismantle the Renewable Fuel Standard program, force US biodiesel producers out of business, and undermine the farm economy. EPA and administration personnel are well aware that the ongoing spree of big oil exemptions destroy demand for biodiesel and render the RFS program meaningless, stated Kurt Kovarik, NBB’s Vice President of Federal Affairs.
Demand destruction falls on biodiesel
According to University of Illinois economist Scott Irwin, virtually all of the demand destruction from small refinery waivers is falling on the biodiesel industry. As EPA continues to “hand them out to every refiner that asks”, the damage to the American biodiesel and renewable diesel industry could reach US$7.7 billion or 2.54 billion (US) gallons (≈ 9.61 billion litres), according to Irwin.
A small refinery processing 75 000 barrels of oil per day can produce nearly 1 billion gallons (≈ 3.785 billion litres) of gasoline and diesel per year. The refinery’s annual RFS obligation would create demand for nearly 20 million gallons (≈ 75.7 million litres) of biodiesel or renewable diesel, which are the most widely available advanced biofuels.
NBB points out that dozens of biodiesel producers across the United States produce less than 20 million gallons each year.
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, Kovarik said.