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US EPA mulls reducing 2018-19 RFS volumes for advanced biofuels and BBD

On September 26, the US Environmental Protection Agency (EPA) issued a Notice of Data Availability (NODA) to provide "public notice and an opportunity to comment on" potential reductions in the 2018 biomass-based diesel (BBD), advanced biofuel, and total renewable fuel volumes, and/or the 2019 biomass-based diesel volume under the Renewable Fuel Standard (RFS) program.

The NODA presents historical data on imports of renewable fuel and several options for how the EPA may consider such data in establishing the final volume requirements using one or more of the waiver authorities provided by the statute.

The EPA is considering to reduce by up to 15 percent the total volume of advanced biofuel and biodiesel to be blended into the US fuel supply in 2018 and 2019 respectively in a bid to mitigate what it sees could result in a potential consumer price hike for biodiesel.

According to the EPA, the price of biodiesel, particularly advanced biodiesel, has been “impacted by the expiration of the federal tax credit at the end of 2016 and may be expected to be impacted further by the imposition of new duties on imports of biodiesel from Argentina and Indonesia”.

The latter concern refers to August 28 preliminary determination by the Department of Commerce (DOC) that countervailing subsidies are being provided to producers and/or exporters of biodiesel from Argentina and Indonesia. The DOC began requiring cash deposits equal to the subsidy rates ranging from 50 – 64 percent for biodiesel from Argentina and 41 – 68 percent for biodiesel from Indonesia.

Although contested, if finalized, this action says the EPA would “have a direct impact on the cost of biodiesel imported from these countries, and could ultimately lead to increased cost to consumers of transportation fuel and the cost to transport goods, and/or could lead to reduced imports from these countries and potentially more limited supplies in the United States.”

With the NODA, the EPA is soliciting commentary from industry and stakeholders on such a reduction and whether the agency has statutory authority to make volume reductions under the RFS.

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