Midwest Governors Urge EPA to Revise Biodiesel Volumes
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Three Midwest governors are urging the Environmental Protection Agency to revise its biodiesel volumes to encourage lower-cost U.S. fuel, support farmers and help decarbonize transportation.
Govs. Kim Reynolds of Iowa, Mike Parson of Missouri and Jim Pillen of Nebraska asked the EPA to adjust its proposed Renewable Fuel Standard (RFS) rules for 2023 through 2025 that set biofuel volumes at levels “that fall far below the industry’s capacity.”
They sent a letter May 25 to EPA Administrator Michael Regan. EPA is expected to finalize RFS volumes by June 14.
“Homegrown renewable fuels also provide American drivers cleaner air and reduced emissions along with a break on fuel prices at the pump. That’s a very important benefit right now with inflation impacting all U.S. consumers,” the governors declared.
“Domestic production of these fuels topped 3 billion gallons in 2022. However, the volumes your agency proposed would not even reach 3 billion gallons by 2025,” they pointed out. “Limiting rural economic development and hindering opportunities for farmers in our states is the wrong approach. Adding to the supply of fuel, expanding agriculture markets and supporting rural economies is the right thing to do right now.”
The U.S. Energy Information Administration recently estimated U.S. renewable diesel production could reach 5.9 billion gallons by 2025.
The governors explained the low EPA projections could jeopardize investments by biodiesel and renewable diesel producers, oilseed processors and farmers in their states without “a true upward trajectory” for RFS volumes.
“There are 19 soybean processing projects across 10 different Midwestern states that will lead to nearly $5 billion in investments to expand or build new facilities over the next three years. As drafted, EPA’s proposed rule could put these investments at risk and stymie the soybean industry’s efforts to react to changing global markets for food and other needs,” the governors noted.
Already, the biodiesel and renewable diesel industry supports more than 75,000 American jobs mainly in farming and oilseed processing, and contributes $23.2 billion to the U.S. economy, the letter noted.
“The number of jobs could increase to 187,000 and the economic benefits could reach $8.8 billion [more] if the industry doubles production as projected,” it added, encouraging the EPA to “substantially increase the RFS’ biomass-based diesel and overall advanced biofuel volumes for 2023, 2024 and 2025 — without decreasing market space for other renewable fuels.”
Kurt Kovarik, vice president of Federal Affairs at the Clean Fuels Alliance America, backed the governors.
“In the first three months of 2023, the clean fuels industry increased biodiesel and renewable diesel production enough to completely fill the meager space that EPA proposed for the next three years. EPA must significantly expand the RFS volumes to support the continued growth and availability of advanced biofuels,” Kovarik said. “Our members have made significant investments to grow the industry, and those investments are already paying off.”
Iowa farmer Dave Walton, also an Alliance board member, said the current EPA proposal fails to provide “any growth at all if you weigh it against the current pace of industry expansion. Biodiesel producers, oilseed processors and farmers face real-world consequences from low RFS volumes.”
Greg Anderson, a Nebraska farmer and board member, noted, “Homegrown biodiesel and renewable diesel production meets every one of the goals for the Renewable Fuel Standard — cleaner air, energy security, rural economic growth and opportunity. And it is providing drivers a break on fuel prices at the pump by increasing the supply. EPA has no reason to set low goals for the advanced biofuel sector.”
Matt Wright, Missouri Soybean Association president and a grower, said biodiesel and renewable diesel growth bring significant economic opportunities to rural farming communities.
“Biodiesel production adds nearly $500 million to the value of our state’s soybean crop and supports thousands of jobs. Expected growth has encouraged investment in additional soybean processing capacity that will keep more value of our soybean crop here in our local communities. As capacity and production grows, the economic benefits will increase — unless EPA fails to get the RFS volumes right,” Wright said.
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Paul Winters, Clean Fuels Alliance director of public affairs and federal communications, explained that the federal government groups biodiesel, renewable diesel and sustainable aviation fuel together into the RFS biomass-based diesel category (nested with the advanced biofuel).
“If the RFS volumes are limited, the fuels have to compete for market space with each other rather than displace petroleum. Some companies produce both renewable diesel and SAF — so essentially they’d have to make a decision which one to invest in. Choosing one over the other — rather than more of all them — limits the jobs and economic growth, new markets and environmental benefits,” Winters said.
He said if the current administration is serious about addressing carbon emissions now and turning the tide on climate change in the near-term, it should support crop-based fuels available today that can significantly cut carbon in on-road transportation, the largest source of emissions.