Defending US Agriculture

EU, U.S. don’t see eye-to-eye on soybean biodiesel sustainability
By Erin Voegele | May 12, 2011

The American Soybean Association has teamed with up other U.S. oilseed producers and industry organizations to encourage the federal government to take action to protect soybean export markets.
The EU passed its Renewable Energy Directive in April 2009. Among the many impacts of the directive is a requirement that biodiesel feedstocks meet certain sustainability requirements. This includes soybeans and soybean oil imported from the U.S. While only two of the 27 member states have adopted the RED to date, implementation of the program could negatively impact the U.S. soybean industry.

This spring, the ASA, National Oilseed Processors, North American Export Grain Association and other supporting organizations sent a letter to Secretary of Agriculture Tom Vilsack and U.S. Trade Representative Ron Kirk outlining concerns related to the impacts the RED is having on access for U.S. agricultural products to EU markets.

“I think there is a need for a concentrated coordinated effort on behalf of U.S. ag to work on how this directive can be complied with from the United States,” says Steve Wellman, ASA first vice president. “One of the main concerns that we have is the impact this would have for letting a country dictate to the United States how we need to produce and ship soybeans. In this case, it’s strictly for biodiesel, but we don’t like the precedent being set that could spread to food and feed requirements also. If the EU can set requirements on the United States, then some other country might try this also.”

The two components of the RED of greatest concern, Wellman says, are the sustainability requirements and the certification of those sustainability requirements. He says the greenhouse gas reduction requirements included in the directive are based on outdated production and transportation data source from Brazil. Actually, data from the U.S. would obviously lead to different results, Wellman says. “We also question the methodology that the EU is using because we have other studies from the U.S. using other methodologies that show a bigger greenhouse gas reduction,” he says.

To comply with the RED, countries are given the option to develop what is called a voluntary scheme, which must be approved by the EU. While other countries, such as Argentina, are working to develop these voluntary schemes, the sheer scale of the U.S. soybean farming community would make that difficult here. “One of the hurdles we have in the United States is we have more than 500,000 soybean farmers and about 17,000 first gathering points for soybeans,” Wellman says. “It’s a huge number of people and systems that have to get certified and comply with the voluntary scheme. It seems like it would be cost-prohibitive in the U.S. It would reduce efficiencies and would demand some sort of a premium on the purchaser, which would be the EU, to make it worthwhile for private industry to do that here.” 

Another option offered under the RED is for the U.S. government to enter into bilateral agreement discussions with the EU.

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