By Lynn L. Bergeson
On May 25, 2018, the National Biodiesel Board (NBB) dropped its nearly decade long pursuit to convert a $1-per-gallon tax credit for biofuel blenders to an equivalent credit for producers. NBB originally sought to change the credit to support the domestic biofuel industry, as some blenders who benefited from the credit were also importing foreign biodiesel. Recent import duties imposed by the U.S. Commerce Department have done a great deal to curb inexpensive biodiesel imports from Indonesia and Argentina (as reported in the Biobased and Renewable Products Advocacy Group (BRAG®) blog post “USTIC Determines Argentinian And Indonesian Biodiesel Dumping Injured U.S. Industry”), thus removing much of the impetus to convert the tax credit program. The $1-per-gallon credit has been retroactively approved for 2017 and NBB continues to push for the credit’s extension in 2018.
By Lynn L. Bergeson
On May 21, 2018, the National Biodiesel Board (NBB), in partnership with industry sponsors, announced a series of five seminars for fuel wholesalers, distributors, retailers, marketers, fleets, municipalities, and other end users focusing on benefits and opportunities surrounding biodiesel. The complimentary series, Exploring Biodiesel (XBX), will be held in the following regions:
- Boston, MA (June 12, 2018);
- Philadelphia, PA (July 18, 2018);
- Los Angeles, CA (August 7, 2018);
- Portland, OR (August 9, 2018); and
- Cleveland, OH (September 18, 2018).
More information and registration is available on the XBX website.
By Lauren M. Graham, Ph.D.
On January 22, 2018, the National Biodiesel Board (NBB) announced that a new study on lifecycle energy and greenhouse gas (GHG) emission effects of biodiesel updates and reaffirms the benefits of using the renewable fuel. The report was published jointly by ANL, Purdue University, and the U.S. Department of Agriculture (USDA). Researchers gathered data on the energy and emissions from farming soybeans, the feedstock for approximately half of U.S. biodiesel. Among the data collected was the largest survey of biodiesel production facilities to date to determine the amount of energy used to convert fats, oils, and grease into biodiesel. The data was analyzed using ANL’s flagship Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET®) LCA model and predicted economic impacts. The results demonstrate that biodiesel reduces GHG emissions by a range of 66 to 72 percent, compared to petroleum diesel. Jim Duffield, former USDA Agricultural Economist, stated that “[the report shows] the highest GHG reduction of any heavy-duty transportation fuel and reflects biodiesel’s natural ability to store solar energy in a liquid form compatible with today’s engines and power generation technologies.”
The study also models the indirect land use change (ILUC) to quantify the future impact of such predicted change in land use. According to Farzad Taheripour, one of the Purdue University authors, “[d]ata available today shows that farmers all around the world are increasing productivity on existing farm land. Calibrating the model to these real-world trends improves the accuracy and reduces the predicted emissions of biofuel expansion.” The improved model demonstrates a 30 percent reduction in ILUC emissions compared to the score adopted by the California Air Resources Board (CARB) in 2015.
By Kathleen M. Roberts
The National Biodiesel Board (NBB) announced that on September 13, 2017, New York Governor Andrew Cuomo signed legislation that introduces bioheating fuel tax credits and bioheating fuel tax requirements to three New York counties. The bill (S5422A) requires all home heating oil sold for use in Nassau, Suffolk, and Westchester counties on or after July 1, 2018, to contain at least five percent biodiesel (B5). Assemblyman Steve Englebright and Senator Phil Boyle sponsored the bill, which received broad support from a range of industry and environmental advocates. New York City, the largest municipal consumer of heating oil in the country, instituted a citywide two percent biodiesel requirement in 2012, which increases to five percent on October 1, 2017. With the new legislation, the entire New York City Metropolitan Area, representing approximately 70 percent of the state’s heating oil market, will have a five percent biodiesel blending requirement. NBB commended Governor Cuomo for signing the bill, stating that it will provide cleaner air for more New Yorkers and support local jobs in the clean energy sector.
By Lauren M. Graham, Ph.D.
On August 1, 2017, the U.S. Environmental Protection Agency (EPA) held a public hearing to hear from all segments of the fuel industry on the proposed rule to set the 2018 renewable volume obligations (RVO) under the Renewable Fuel Standard (RFS) program. Among the nearly 150 individuals and organizations scheduled to testify at the hearing were numerous biofuel industry stakeholders who praised EPA for issuing the proposed rule on time and for maintaining the statutory 15 billion gallon volume requirement for conventional renewable fuels, but urged the agency to increase the proposed requirements for advanced and cellulosic fuels.
During its testimony, the Renewable Fuels Association (RFA) stated that it believes that EPA “erred on the side of pessimism with regard to the potential for significant growth in cellulosic ethanol commercialization.” According to Bob Dinneen, Chief Executive Officer (CEO) of the RFA, many plants are in the process of adding bolt-on fiber conversion technology to their existing facilities, which could dramatically increase cellulosic ethanol production next year. RFA intends to provide EPA with updated projections for cellulosic fuel before the comment period ends. Dinneen also highlighted concerns with Renewable Identification Number (RIN) market manipulation and suggested that EPA continue to allow imported biofuels to help comply with the RFS program.
With a group of approximately 20 speakers, the National Biodiesel Board (NBB) highlighted key data and information regarding market realities and underutilized capacity, and the impacts on small businesses and manufacturing, feedstock availability, and consumer choice. Donnell Rehagen, NBB CEO, stated that the “current numbers shortchange the progress we have made. They are a step back for the RFS, job creation, small businesses and rural economies.” Rehagen clarified that “these steps backwards are not about paper but people.”
The Renewable Energy Group (REG) informed EPA that ample feedstocks, technology and quality advances, and subsidized imported biofuel are three reasons why the agency should increase the biomass-based diesel and advanced biofuel minimum volumes. Derek Winkel, Executive Director of Manufacturing, stated that “investments [into the biofuel sector] would not have been made without increasing demand for biodiesel and renewable diesel. This demand, in part, is supported by a strong, growing and consistent RVO and RFS.” Paul Nees, Executive Director of REG’s Operations Control Team, testified that “[t]he domestic biodiesel industry is ready and able to fulfill demand gaps with low-cost, high-quality fuel with no market disruption.”
During its testimony, the Iowa Renewable Fuels Association (IRFA) suggested that the recent verdict in Americans for Clean Energy v. EPA should radically alter the factors EPA considers when determining RFS levels this year and going forward. “The Court clearly affirmed that Congress’ intent for the RFS from the very beginning was to crack the petroleum monopoly and to push biofuels into the marketplace,” stated Monte Shaw, IRFA Executive Director. “Whether in a reset discussion or in setting biodiesel and ethanol levels, the EPA must act according to the clear directive from the Court.”
The American Coalition for Ethanol's (ACE) testimony highlighted its view on conventional biofuel levels, the general waiver authority as it relates to inadequate domestic supply, the use of the reset provisions, and updating the greenhouse gas modeling for corn ethanol as it relates to Brazilian sugarcane ethanol. The Coalition intends to detail its position on these topics in written comments. Jonathon Lehman, ACE legislative counsel, also praised Nebraska Governor Pete Ricketts and Iowa Governor Kim Reynolds for their strong public support for keeping the RFS on track.
Stakeholders representing the oil industry were also present to testify to the problems they see with the RFS program, including the representatives from the American Petroleum Institute (API), the American Fuel and Petrochemical Manufacturers (AFPM), and Valero.
Written statements and supporting information concerning the proposed rule are available under Docket ID No. EPA-HQ-OAR-2017-0091. As stated in the Federal Register notice, EPA will consider the written comments with the same weight as any oral comments presented at the public hearing.
By Kathleen M. Roberts
On July 25, 2017, the National Biodiesel Board (NBB) announced that the California Air Resource Board (CARB) certified a biodiesel additive that will make California B20 blends the cleanest diesel fuel with the lowest emissions profile available in the U.S. The additive known as Branded VESTA™1000 reduces every measurable regulated emission, including nitrogen oxides (NOx), when blended with CARB diesel fuel, California’s unique clean-burning biodiesel formulation. A 20 percent blend of biodiesel with the additive reduced NOx by 1.9 percent and particulate matter by 18 percent compared to CARB diesel. The certified additive ensures compliance with CARB’s Alternative Diesel Fuel Regulation, which goes into effect on January 1, 2018. NBB led the initial research and development of the additive.
By Kathleen M. Roberts
On June 20, 2017, the National Biodiesel Board (NBB) announced that nearly 100 biodiesel advocates from across the country visited Capitol Hill to urge Congress to bring back the biodiesel tax incentive as proposed in both chambers of Congress. Industry participants consisted of biodiesel producers, distributors, and feedstock suppliers from over 24 states. According to Anne Steckel, the Vice President of Federal Affairs at NBB, the bipartisan biodiesel tax incentive should be reinstated since it helps support tens of thousands of jobs nationwide and the proposed reforms address the unintended consequences of the credit. The legislative proposals in Congress restructure the incentive so that U.S. producers qualify for the credit, which cuts off subsidies for foreign manufacturing and reduces the potential for tax fraud.
On October 30, 2013, the U.S. Court of Appeals for the District of Columbia approved the request by Monroe Energy to expedite review of the current RFS litigation challenging EPA's final rule setting the 2013 renewable volume obligations under the federal RFS (the 2013 RFS rule). In October 2013, Monroe, the American Petroleum Institute (API), and the American Fuel and Petrochemical Manufacturers (AFPM) filed individual cases before the court challenging the 2013 RFS rule. These cases have been consolidated.
In response to Monroe's petition for expedited review, the court issued an order encouraging all parties to work together and propose a mutually agreed upon expedited schedule. The parties, including EPA, submitted a proposed expedited briefing schedule on October 24 and the court approved it on October 30. Under the schedule, all briefs will be submitted by the end of February 2014.
Also on October 24, 2013, the National Biodiesel Board (NBB) filed a petition with the court to intervene in the case on behalf of EPA. NBB asserts that its member companies would be harmed if the 2013 RFS rule were to be changed or weakened.
Last week, federal securities regulators charged Imperial Petroleum, Inc. and its subsidiary, Indiana-based E-Biofuels LLC, with carrying out a fraudulent federal RFS renewable identification number (RIN) and tax credit scheme. It is alleged that from November 2009 to January 2012, this scheme generated 52 million fraudulent RIN credits and $35 million in false tax credits, and cost investors approximately $60 million. More information is available online.
This is the fourth major biodiesel RIN fraud case, but the industry's leading voice in Washington, D.C., the National Biodiesel Board (NBB), reportedly argues it should not change anything with respect to RFS RIN enforcement because the alleged illegal activities occurred before NBB and others worked with EPA on a new RIN enforcement proposal, which is expected to be promulgated this year.