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Biodiesel industry seeks to reverse Argentina import decision which could make it easier for imports to come into U.S.
March 31, 2015
The National Biodiesel Board is calling for the Environmental Protection Agency to stay its recent decision to streamline Argentinian biodiesel imports to the U.S. under the Renewable Fuel Standard (RFS), pending public review and comment.
In a petition filed Monday with EPA Administrator Gina McCarthy, NBB cited the lack of public comment on the EPA decision and little transparency regarding the plans Argentinian producers can use to demonstrate compliance with the RFS.
“We have serious questions about how Argentinian producers will certify that their product meets the sustainability requirements under this new approach and whether U.S. producers will be operating under more strict regulations,” said NBB vice president of federal affairs Anne Steckel. “As a result, we have asked the EPA to hold and reconsider its approval to allow a more open process with public comment and discussion.”
“Given the circumstances, we think this is a very reasonable request,” Steckel added. “The U.S. biodiesel industry is in a state of crisis right now as a result of EPA’s continued delays in finalizing RFS volumes. An influx of Argentinian biodiesel will only exacerbate the domestic industry’s troubles at the worst possible time.”
The EPA initially approved the application from Argentina’s biofuels association, CARBIO, on Jan. 27.
Typically under the RFS, foreign producers must map and track each batch of feedstock used to produce imported renewable fuels to ensure that it was grown on land that was cleared or cultivated prior to Dec. 19, 2007 – when the RFS was established.
The EPA’s January decision allows Argentinian biodiesel producers to instead rely on a survey plan being implemented by a third party to show their feedstocks comply with the regulations. The goal of the survey program is to ease the current map and track requirements applicable to planted crops and crop residues grown outside of the United States and Canada, resulting in a program that seems far less stringent and more difficult to verify.
Because the EPA did not provide an open process when it considered the application, the limited information provided in EPA’s approval document raises significant questions about whether soybean-oil biodiesel being imported from Argentina meets the renewable biomass requirement under the regulation. Many of the soybeans processed into soybean oil in Argentina come from Uruguay, Peru, Brazil, and other countries. Given the complex international trade involved and the apparent gaps in the program as outlined in EPA’s approval document, the EPA will have little ability to verify the survey plans proposed by Argentinian producers, even with the third-party surveyor’s limited reviews. Argentina would be the first country to use a survey approach under the RFS. Canada and the U.S. operate under an aggregate approach in which feedstock is approved so long as the aggregate amount of agricultural land in each country does not grow.
NBB estimates that up to 600 million gallons of Argentinian biodiesel could enter the U.S. next year as a result of the change, particularly after the European Union blocked Argentinian biodiesel in 2013 after the country exported some 450 million gallons to the EU in 2012.
In 2014, the entire U.S. biodiesel market was about 1.75 billion gallons. In addition to the new U.S. survey rules, Argentina supports its domestic biodiesel program with a cost-distorting “Differential Export Tax” program that allows Argentinian biodiesel to undercut domestic prices.
Biodiesel – made from a variety of resources including recycled cooking oil, plant oils such as soybean oil, and animal fats – is the first EPA-designated Advanced Biofuel to reach commercial-scale production nationwide. According to the EPA, biodiesel reduces greenhouse gas emissions by 57 percent to 86 percent compared with petroleum diesel. With plants in nearly every state in the country, the industry supports some 60,000 jobs.
The EPA is more than two years late in establishing volumes under the RFS after failing to establish a requirement for 2014 and 2015. The continued uncertainty under the policy has destabilized the biodiesel industry, causing many U.S. production plants to stop production and lay off employees.
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