EPA Auditing Waste Oil Claimed in RFS

LINCOLN, Neb. (DTN) -- The U.S. Environmental Protection Agency has been auditing biofuel companies to see where they're sourcing waste cooking oils as feedstocks after the agency in 2023 updated Renewable Fuel Standard accounting practices for companies earning biofuel credits.

In July 2024, the European Commission announced antidumping tariffs of 36% on biodiesel imports from China in part because of suspicions China had slipped palm oil into the used cooking oil supplies. Palm oil is considered to be a more carbon-intensive feedstock than cooking oil.

Though China's practice may raise alarms for U.S. officials, an EPA spokesperson told DTN on Thursday the agency's audit is now considered a routine practice in the implementation of the RFS.

"EPA investigates, where appropriate, whether feedstocks used to produce renewable fuel, including used cooking oil, qualify under the Renewable Fuel Standard program," EPA spokesperson Jeff Landis said.

"EPA has conducted inspections of renewable fuel producers, which include, among others, an evaluation of the locations that used cooking oil used in renewable fuel production was collected. These investigations, however, are ongoing, and we are not able to discuss ongoing enforcement investigations, including the number of inspections, facility identities and dates."

The inspections and follow-up investigations are part of EPA's "routine evaluation" of RFS compliance under the Clean Air Act and "reflect the agency's commitment to a stable RFS program that strengthens the nation's energy independence, advances low-carbon fuels, and supports agricultural communities," Landis said in a statement.

DTN Lead Analyst Todd Hultman said the growing popularity of using waste cooking oil to produce biofuels is bringing more scrutiny, https://www.eia.gov/….

"For a little context, used cooking oil falls into the 'yellow grease' category in the Energy Department's monthly report of biofuel feedstocks used," Hultman said.

"In the first five months of 2024 (the most recent data), yellow grease used to make biofuels averaged 610 million pounds a month, up 17% from the same period a year ago. By comparison, soybean oil used to make biofuels averaged 1.004 billion pounds in the first five months of 2024, up 3% from the same period a year earlier."

Used cooking oil and tallow have seen significant gains as feedstocks used to make biofuels during the past 18 months.

Sustainable aviation fuel guidelines released in late April make used cooking oil an especially popular feedstock, Hultman said, as it has one of the lowest carbon scores of eligible feedstocks.

"Because it is considered a waste product, it does not have the same burdensome production requirements found with corn ethanol and soybean oil," he said.

"There is also a temptation for used cooking oil providers to find inexpensive ways to turn soybean oil into used cooking oil."

Last month, several agriculture interest groups asked U.S. Treasury Secretary Janet Yellen to include a domestic-feedstock requirement in upcoming guidance on the 45Z Clean Fuel Production tax credit.

The letter, signed by the American Farm Bureau Federation, National Corn Growers Association, National Farmers Union and the American Soybean Association, said that without such a requirement, the benefits of the policy "are at risk of being diverted" from American farmers.

Read more on DTN:

"Do Corn and Soybeans Have a Chance in the SAF Market?" https://www.dtnpf.com/…

"Ag Seeks SAF Feedstock Mandate on 45Z," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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