US biodiesel stakeholders request meeting with Trump over RFS waivers
In the United States (US), National Biodiesel Board (NBB) CEO Donnell Rehagen and American Soybean Association (ASA) President Davie Stephens have sent a joint letter to the White House. The duo requests a meeting with President Donald Trump to discuss small refinery exemptions and the Renewable Fuel Standard (RFS) as "demand destruction" is already forcing biodiesel producers out of business.
Dated August 21, 2019, the letter details the damage the recently announced US Environmental Protection Agency’s (EPA) small refiner waivers have dealt the biodiesel and renewable diesel industry, and the soybean farmers who provide much of its feedstock, and emphasizes the need to include biodiesel-specific measures in any proposed resolution.
“According to a University of Illinois economist, nearly all demand eroded by small refinery exemptions falls on biodiesel and renewable diesel producers by nature of how the RFS is constructed,” the letter states. “That disproportionate impact on biodiesel and renewable diesel producers, in turn, hits US soybean farmers already having a tough time from tariffs and insurmountable weather issues this planting season.”
The signatories also note in the letter that “while many economists worry about an economic recession within the next year, America’s farmers are already facing a severe economic downturn”.
The two groups conclude the letter with a request to meet with the President.
We would appreciate an opportunity to discuss how the administration can repair the uncertainty created by zero growth in biomass-based diesel coupled with demand destruction caused by the waivers. We look forward to an opportunity to sit down with you and discuss solutions to the crisis our industries are facing as a result of recent policy decisions.
University of Illinois economist Scott Irwin has found 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 US biodiesel and renewable diesel industry could reach US$7.7 billion or 2.54 billion gallons (≈ 9,61 billion litres) according to Irwin.
National Biodiesel Board (NBB) CEO Donnell Rehagen Rehagen added that biodiesel producers have suffered the greatest impact from the administration’s small refinery exemptions but have been ignored so far in discussions about how to repair the damage.
We’re seeing biodiesel producers across the country — from Pennsylvania to Iowa to Georgia and Texas — shutting their doors and laying off workers as a result of demand destruction. The RFS was designed to support growth of advanced biofuels, but the small refinery exemptions have turned the program upside down, said Rehagen.
A small refinery processing 75 000 barrels of oil per day (bpd) can produce nearly 1 billion (US) 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. Dozens of biodiesel producers across the United States produce less than 20 million gallons each year.