What’s Ahead in Washington for 2019

Although the biodiesel industry accomplished some important goals in 2018 and has much more work ahead in 2019, the 116th Congress presents many opportunities and challenges. Rest assured the National Biodiesel Board is staying on top of the issues.
By The National Biodiesel Board | December 27, 2018

The National Biodiesel Board worked with its members throughout 2018 to fight for federal policies that support the industry’s growth. Renewal and long-term extension of the biodiesel and renewable diesel tax incentive as well as securing sustainable market growth under the Renewable Fuel Standard remain key policy priorities. The industry made some progress toward those goals in 2018. But there’s more work ahead in 2019.

The industry’s first task for the new year will be educating new members of Congress and their staffs about the biodiesel industry, the benefits of biodiesel use, and the importance of our federal policy priorities. The industry will be without a few of its long-time champions after the 2018 elections, so NBB will look to engage new ones. The memberships of important committees will change as Democrats take over the majority in the U.S. House of Representatives in January.

In the final months of the 115th Congress, renewal of the biodiesel and renewable diesel tax incentive was important unfinished business for many of the industry’s defenders. Through the Bipartisan Budget Act signed into law in February 2018, Congress retroactively renewed the incentive only for 2017. In September, before Congress paused for the election, Reps. David Young, R-Iowa, and Dave Loebsack, D-Iowa, initiated a letter to House leaders asking them to prioritize renewal of the tax incentive before the end of the year. The letter was signed by 46 members of Congress, both Republicans and Democrats.

NBB has for many years advocated a long-term, multiyear tax incentive that provides producers certainty and encourages investment and growth. NBB’s position is aligned with all other stakeholders of the tax incentive—including blenders, truck stop and convenience store operators, and truck drivers. In late November, Rep. Kevin Brady, R-Texas, worked with Sen. Chuck Grassley, R-Iowa, to propose a multiyear extension of the biodiesel tax incentive as part of a package of corrections and amendments to the tax code. The proposed extension would provide certainty to the biodiesel industry for several years.

Kurt Kovarik, vice president of federal affairs with the NBB, stated, “The biodiesel industry has long advocated for a long-term tax extension to provide certainty and predictably for producers and feedstock providers. Too often, the credit has been allowed to lapse and then be reinstated retroactively, which does not provide the certainty businesses need to plan, invest and create jobs. We appreciate the recognition that the biodiesel industry is integral to our domestic energy needs through this long-term extension.”

The industry will have to continue to fight for certainty in the RFS. Throughout 2018, NBB and its members engaged with representatives and senators seeking to reform the program. Sen. John Cornyn, R-Texas, led one effort to bring biofuel and oil producers to the table to negotiate changes to the program. At the end of the process, Cornyn found there was not enough agreement between the two sides to introduce legislation.

Rep. John Shimkus, R-Illinois, who served as chairman of the House Energy and Commerce Subcommittee on Environment, also worked throughout 2018 on legislation to reform and sunset the RFS. During Congress’ lame duck session, he offered draft legislation for discussion, proposing a change to the gasoline standard—requiring gasoline to meet a higher research octane number—as a replacement to the RFS. NBB testified at a hearing on the issue and made its position as clear as possible: The proposed legislation does not support predictable growth over time and the biodiesel industry would not benefit from the other provisions of the draft. 

During the upcoming year, the industry will face additional RFS issues such as small refinery exemptions and U.S. EPA’s planned rule changes.

EPA announced it will initiate a rule and public comment period to reset the statutory RFS volumes for 2020-’22. The agency triggered this reset by waiving the annual statutory volumes by more than 20 percent for 2018-’19. NBB previously engaged EPA on the planned reset and advocates for higher volumes in the biomass-based diesel and advanced biofuel categories as the agency develops the reset proposal and the 2020 annual rule.

The rule for 2019 and biomass-based diesel volume for 2020 sets a precedent for the reset. The final volumes were released on deadline Nov. 30, with the biomass-based diesel volume for 2020 set at 2.43 billion gallons. EPA set the 2019 advanced biofuel volume at 4.92 billion gallons. NBB had asked EPA to set the 2020 biomass-based diesel volume at 2.8 billion gallons, consistent with the agency’s estimate of the amount that will be produced and used in the coming year. While the agency finalized the rule very close to the volumes they originally proposed, it also recognized that biomass-based diesel fills most of the overall advanced biofuel category.

“EPA recognizes that the biodiesel and renewable diesel industry is producing fuel well above the annual volumes,” said NBB CEO Donnell Rehagen. “The industry regularly fills 90 percent of the annual advanced biofuel requirement. Nevertheless, the agency continues to use its maximum waiver authority to set advanced biofuel requirements below attainable levels.”

In setting the final volumes for 2019, EPA failed to account for anticipated small refinery exemptions. NBB continues to pursue litigation that could force the agency to review its past rules and change its methodology going forward. The industry continues to highlight the impact these exemptions have on demand for biodiesel and renewable diesel.

Although the industry accomplished some important goals in 2018 and has much more work ahead in 2019, the 116th Congress presents many opportunities and challenges for the biodiesel industry.

 
 
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