Renewable Fuel Standard Background (RFS):
The growth of biodiesel and renewable diesel under the Renewable Fuel Standard is a tremendous success story. Our industry is delivering the vast majority of EPA-designated Advanced Biofuel under the RFS and has proven that it can grow in a sustainable way to reduce pollution, create jobs and diversify our fuel supply.
On May 18, the EPA released its most recent proposal for RFS volumes covering Biomass-based Diesel for the 2018 calendar year and all other categories for 2017. The proposal calls for increasing the Biomass-based Diesel volume by only 100 million gallons, from 2 billion gallons in 2017 to 2.1 billion gallons in 2018. It also calls for raising the overall Advanced Biofuel volume from 3.61 billion gallons in 2016 to 4 billion gallons in 2017, well below the statutorily required volume of 9 billion gallons.
While the proposal includes limited growth for biodiesel and the potential for additional biodiesel growth under the overall Advanced Biofuel category, it clearly does not fully capitalize on our industry’s potential for growth. With significant underutilized production capacity and feedstock supplies, we are pushing for a standard of at least 2.5 billion gallons in the final rule slated to be completed in November.
The public comment period for the proposal closed on July 11. But as the process moves forward, consider writing a letter to the editor or op-ed in your local newspaper highlighting your company and the resounding success of biodiesel as America's first EPA-designated Advanced Biofuel to reach commercial-scale production nationwide. Also please stay in touch with your members of Congress, who have an influential voice on the future of the RFS. Consider inviting your lawmakers to visit your plant this summer or fall when lawmakers are home campaigning.
Our Washington office is always available to help, so please don't hesitate to call us at 202-737-8801.
To reach your members of Congress:
Quick Talking Points
- Advanced Biofuel, Here Now: Biodiesel is the most successful EPA-designated Advanced Biofuel in the U.S, and the first to reach commercial-scale production nationwide. It is proving that Advanced Biofuels are here today, working to reduce harmful emissions, create jobs and increase our energy security by diversifying fuel supplies. Congress and the White House should continue that success with modest, sustainable growth under the RFS.
- Jobs and Economic Impact: With plants in nearly every state in the country, the biodiesel industry is supporting 47,400 jobs and $8.4 billion in economic activity nationwide. Every 100 million gallons of biodiesel production supports roughly 3,200 jobs, and producers are ready to expand production and hire new workers with steady growth under the RFS. RFS growth also fuels research and development on new feedstocks and production technologies paving the way for the next generation of biodiesel refining
- Reducing Harmful and Costly Emissions: According to the EPA, biodiesel reduces lifecycle greenhouse gas emissions by 57 percent to 86 percent compared to petroleum diesel. With more than 10 billion gallons used though
2015, biodiesel has cut carbon pollution by 93.7 million metric tons – the same impact as removing more than 19.7 million passenger vehicles from America’s roadways. Additionally, the EPA consistently cites tailpipe emissions from traditional diesel – primarily from older trucking fleets and other heavy-duty vehicles – as a major national health hazard. Substituting higher amounts of biodiesel for traditional diesel fuel is the simplest, most effective way to immediately reduce diesel emissions.
- Improving U.S. Energy Security: The biodiesel industry is increasing domestic energy production, diversifying our fuel supplies and expanding domestic refining capacity so that we’re not so vulnerable to global oil markets and associated refining bottlenecks. This improves U.S. energy security because despite increased U.S. oil production, petroleum is a global commodity, and U.S. consumers will continue to be at the mercy of heavily manipulated global petroleum prices until we have diversity in the market. Recent decisions from OPEC to steer those markets shows the continued danger to our economy and national security from our dependence on petroleum.
- Ensuring Domestic Production Under RFS: Biodiesel is the only domestic EPA-designated Advanced Biofuel delivering significant volumes under the RFS. In fact, biodiesel in recent years has produced enough fuel to fill the vast majority of the Advanced category. The only other fuel filling a significant portion of the Advanced category is imported sugarcane ethanol. Without specific action by EPA to expand the Biomass-based Diesel category, these cheaper imports of sugarcane ethanol would likely continue growing, displacing domestic production and contributing further to the ethanol “blendwall.” The only way to ensure larger domestic production of Advanced Biofuels under the RFS while avoiding “blendwall” concerns is to continue growing the biodiesel requirement.
- Addressing the Diesel Market: It was always the intent of Congress that the RFS address not just the gasoline market but also the diesel pool, which fuels pivotal transportation and industrial applications such as long-haul trucks, buses, barges, and heavy machinery and which accounts for a significant share of the nation’s air pollution in the transportation sector. You simply can’t have effective renewable fuels policy without addressing the diesel market with diesel alternatives, Additionally, growing the Biomass-based Diesel pool does not contribute to the ethanol “blendwall.”
Helping Consumers at the Pump: Biodiesel is a cost-effective renewable alternative to petroleum diesel that, with help from the Renewable Fuel Standard (RFS), is saving diesel consumers money. Each gallon of RFS-qualified biodiesel is accompanied by a RIN credit. The value of that credit, which is traded on the open market, is factored into the value of each gallon of biodiesel. This added value allows producers to sell biodiesel at a lower price to fuel distributors or fleet managers, who can then pass along savings to consumers. Consider the following comments from market stakeholders:
- Navy Secretary Ray Mabus, Testimony before U.S. House Armed Forced Committee, April 16, 2013: “This past year the Navy purchased a B20 blend (80 percent conventional/20 percent biodiesel) for the steam plant at the St. Julien's Creek Annex, near Norfolk, VA. The cost of the B20 is 13 cents per gallon less expensive than conventional fuel, and is projected to save the facility approximately $30,000 over the 2012-2013 heating season.”
- Mayor Sherman Guyton of Gadsden, Ala., which is saving about $100,000 annually by switching much of the city’s fleet to 20 percent biodiesel blends:“We are being kinder to our environment, we are saving money and we are reducing our dependence on foreign oil. There’s no downside. It’s a win, win, win situation.” (Gadsden Times - May 30, 2013).
Feedstock Diversity: Biodiesel is one of the most diverse fuels in the world, produced using a broad mix of resources including recycled cooking oil, agricultural oils and animal fats. This has helped shape a nimble industry that is constantly searching for new technologies and feedstocks. Industry demand for new alternatives is stimulating, and often financing, research on new feedstocks such as algae and camelina.