The Need for Trans-Atlantic Cooperation

By | February 11, 2008
As many of you are well aware, the European Biodiesel Board (EBB) has repeatedly called for the imposition of punitive anti-dumping and countervailing duties on U.S. biodiesel exports to Europe. The U.S. and European biodiesel industries have a long-standing tradition of working together to promote the increased production and use of biofuels as a way to reduce petroleum consumption and address critical climate change issues. It is unfortunate that the EBB is advocating a course of action that could hinder this progress, and in the interest of continued trans-Atlantic cooperation, we hope that cooler heads will prevail on this matter.

U.S. biodiesel exports are not the cause of the problems facing the European biodiesel industry. In fact, both the U.S. and European biodiesel industries are facing similar challenges. Dramatic increases in feedstock costs have created difficult market conditions for biodiesel producers. This is particularly the case with rapeseed oil, the dominant European feedstock. These facts, in tandem with policy changes adopted by European Union member states, are the main causes of the problems facing the European biodiesel industry.

It is in the mutual interests of both the U.S. and European biodiesel industries to enhance global trade in biofuels. In fact, senior EU officials have publicly noted that if Europe is to meet its goal to increase biofuels use, the EU will have to import fuels such as biodiesel. U.S.-produced biodiesel yields a 78 percent reduction in carbon lifecycle emissions and can play a constructive role in the global effort to reduce greenhouse gas emissions.

The U.S. biodiesel industry remains open to working with our counterparts in Europe to not only promote trade in biofuels, but to stop unintended abuses of existing biofuels incentives. For example, the National Biodiesel Board has strongly denounced so-called "splash-and-dash" transactions where fuel produced outside the United States is transshipped through the United States for the sole purpose of claiming the U.S. blenders' excise tax credit before being sent for final use in Europe. The NBB believes this practice may be more widespread than is being acknowledged by the EBB, and NBB is aggressively promoting efforts in Congress to end this practice. As has always been the case, we hope the EBB will recognize our genuine efforts to address this issue.

Lastly, it is also worthwhile to remember that in December, Congress passed and President George W. Bush signed H.R. 6, the Energy Independence and Security Act. This legislation, for the first time, creates a renewable requirement that will apply specifically to diesel fuel in the United States. The legislation requires the use of 500 million gallons of biomass-based diesel, which includes biodiesel, in 2009, and increases to 1 billion gallons in 2012. The 500 million gallons required in 2009 represents the entirety of the U.S. industry's production this year. As the renewable fuels standard's biomass-based diesel requirement increases, common sense dictates that increasing amounts of U.S.-produced biodiesel will be needed to meet the domestic mandate.

The U.S. and European biodiesel industries are facing many of the same challenges. We share a deeply held belief that biodiesel can play a constructive role in addressing global energy and environmental concerns. We are united in our desire to promote sustainability. In fact, our organization provided prominent roles for EBB members at our National Biodiesel Conference and Expo that was held in February. We hope the NBB and EBB can work constructively to resolve our differences and move ahead in a cooperative manner.

Magellan opens new biodiesel facility in Colorado
Pipeline company Magellan Midstream Partners L.P. recently opened a new biodiesel blending and storage facility at a petroleum terminal in Aurora, Colo. The new biodiesel blending facility has an 84,000-gallon tank and will make biodiesel blends available to petroleum distributors.

"We applaud Magellan for taking this step to include biodiesel storage and blending within this terminal," says Joe Jobe, National Biodiesel Board chief executive officer. "Developing blending infrastructure at the terminal level is critical to integrating biodiesel into the existing U.S. liquid fuel distribution system, which will greatly benefit our national energy security."

More than 40 terminals nationwide carry biodiesel. CHS Inc., a leading energy and grain-based foods company, will market and distribute the fuel from Magellan's facility.

"We are celebrating the opening of our 10th biodiesel distribution system inside one of our petroleum distribution terminals," says Don Wellendorf, Magellan chief executive officer. "We view renewable fuel distribution as a growth opportunity for our company, and we are a trailblazer in this area."
Current Colorado biodiesel users already include Jefferson County Public Schools, Lakewood, New Belgium Brewery in Ft. Collins, Safeway and Aspen Ski Resort.

"Today we are witnessing a renewable energy revolution in our state and in our nation," said U.S. Sen. Ken Salazar, who spoke at the opening ceremony. "This revolution is fueled by innovative firms like Magellan and CHS who understand that the production of clean, renewable biofuels not only strengthens America's national and environmental security, but offers an unprecedented opportunity to spur economic growth and job creation in our rural communities as well."

Magellan is in the process of constructing 145,000 barrels of biodiesel storage at its terminal in New Haven, Conn. The company is also exploring transportation opportunities for biodiesel blends and is planning to transport a low-level biodiesel blend in its pipeline from Houston to Dallas early this year.

Magellan Midstream Partners L.P. owns and operates the nation's longest pipeline for refined petroleum products. The company is headquartered in Tulsa, Okla. More information is available at www.magellanlp.com.

Manning Feraci
NBB vice president of federal affairs
 
 
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