Biodiesel Pushes for Multi-Year RFS

LINCOLN, Neb. (DTN) -- With EPA expected to release a Renewable Fuel Standard proposal in a couple of weeks, the biodiesel industry is calling on the agency to expand its RFS volumes on a much-higher growth trajectory than the industry has ever seen.

EPA is set to release what is expected to be a multi-year set of RFS volumes for 2023 and beyond on Nov. 30.

Clean Fuels Alliance America CEO Donnell Rehagen said during a press briefing Monday that his industry has always been in a position to produce more biomass-based diesel than what the RFS called for.

CFAA members are in Washington, D.C., this week talking with members of Congress and pushing its message into the forefront of policy discussion.

"We believe that EPA should increase the biomass-based diesel volume by 500 million gallons and the advanced biofuels by 1 billion gallons for each of the next two years," Rehagen told reporters.

"We're seeing the production coming online of renewable diesel. One of the factors that Congress has directed the EPA to consider when they set the annual RFS volumes is the benefit for agriculture and for rural communities. We currently support 75,000 jobs and over $23 billion in economic opportunity. So, it's a substantial industry that this industry has grown into and creates a lot of value, particularly in the rural economies as well."

Rehagen said his association sees the potential for becoming a 6-billion-gallon industry -- far larger than the current 2.76 billion gallons of biomass-based diesel set in the 2022 volumes by EPA.

"We believe that is very achievable," he said.

"But it's going to take the support of the RFS to do that. Meeting that 6-billion-gallons would increase the overall economic impact to $61 billion to support over 187,000 jobs. So, you can see this substantial opportunity that the EPA has and this administration has to help push our industry to where we want to be and the impact that that's going to have on upon the economies."

Clean Fuels Alliance America Interim Chairman Mike Rath said there are a number of factors EPA has to consider when setting RFS volumes going forward.

That includes the volume of potential feedstock supplies, available infrastructure, and the rate of commercial production for biofuels.

"I think we can demonstrate progress on each one of these factors," Rath said.

"Commercial production is growing quickly. Biodiesel and renewable-diesel capacity as of August 2022 is 750 million gallons higher than one year ago. According to EIA (Energy Information Administration) data renewable diesel and biodiesel capacity are roughly equal now. Production this year through August of 2022 is up by 400 million gallons compared to the first eight months of 2021. So, our industry is meeting the increased volume for 2022 that EPA set back in June of this year."

Rath said the industry expects it will continue to grow during the next several years based on the current level of investment taking place among companies.

In addition, Rath said the soybean industry is investing more than $4 billion to increase crush capacity equivalent to 1 billion gallons of fuel production through 2027. USDA's higher-blends infrastructure incentive program has matched industry investments to increase infrastructure to more than 1 billion gallons of biodiesel.

"The volumes we recommended to EPA are clearly achievable based on these factors," he said.

As part of the meetings this week in D.C., Rehagen said industry representatives expect to press EPA on making sure the agency keeps on schedule with releasing future RFS volumes.

"Although we're anticipating these volumes, it's much later than we would like to see for our industry to have a clear vision going forward and demand," he said.

"This rule this year will be one of the first times that the EPA under the set provision is able to set the overall advanced volumes under its own authority. For us, though, in the biomass-based diesel industry, we've actually experienced this process for almost a decade now. Since 2013 the EPA has had that ability to set our volumes on an annual basis. And so, for the next several years we believe EPA has a responsibility to help drive some aggressive growth in the RFS volumes from biomass-based diesel and for advanced biofuels."

Biodiesel industry leaders also can expect to see a change in Congress, as the Republicans appear poised to gain back control of the U.S. House of Representatives.

Rehagen said although they expect to see new faces, support for the industry likely would not change.

"We've always enjoyed bipartisan support for our fuels," he said.

"When you look at it from the perspective of what our industry is impacting, whether it's rural economies in the Midwest, or whether it's folks who are seeking a climate perspective maybe on the coasts, we have a lot to offer. Every office is important, but I think the fact that we've enjoyed that kind of bipartisan support in the past we believe that we will continue to see that and now we will have a job on our hands to help educate some of the newest members of Congress as to what our industry is doing."

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

Follow him on Twitter @DTNeeley

(c) Copyright 2022 DTN, LLC. All rights reserved.