More than 200 million gal. of U.S. biodiesel production capacity have been idled as a result of policy instability, according to a letter the National Biodiesel Board (NBB) and 33 of its members sent to President Donald Trump asking that he save small biodiesel producers harmed by the Trump Administration's small refinery exemptions.
Within a week of the Environmental Protection Agency’s decision to grant 31 small refinery exemption waivers, one U.S. biodiesel producer announced plans to close three plants – in Pennsylvania, Georgia and Mississippi.
According to University of Illinois economist Scott Irwin, the exemptions especially harm biodiesel and renewable diesel producers because of the way the Renewable Fuel Standard (RFS) is constructed, the letter noted.
"Every small refinery waiver issued by the Environmental Protection Agency has the potential to put a U.S. biodiesel producer out of business," NBB wrote to Trump. "We anticipate that additional facilities will close over the next several months if you do not take quick action to restore RFS volumes for biodiesel and renewable diesel."
The letter highlights additional policy headwinds that are harming the biodiesel industry, including the U.S. Department of Commerce's recent proposal to virtually eliminate trade protections against heavily subsidized biodiesel imports from Argentina. Biodiesel producers have waited more than 20 months for Congress to address expired tax incentives.
"Growth in the biodiesel market is the only way to keep domestic producers operating and protect U.S. workers' jobs," the letter concluded.
Kurt Kovarik, NBB vice president of federal affairs, added, "It is important for President Trump to keep his word and continue supporting the Renewable Fuel Standard. We are asking the Administration to, first, restore the RFS volumes undercut by small refinery exemptions over the past several years and, second, continue to provide growth for biodiesel and renewable diesel in the RFS program."
EPA is proposing zero growth for biomass-based diesel. “We have asked the agency to do two things: first, properly account for the small refinery exemptions handed out over the past few years and going forward, and second, provide growth in the biomass-based diesel market for 2020 and 2021,” the letter states.