Posted June 17, 2009

As most of you should have heard by now, EPA's proposed rule to implement RFS2 finds soy-based biodiesel ranking much lower than expected in GHG reduction when including indirect land use assessments into the calculations. EPA suggested soy biodiesel's poor GHG rating could be boosted by blending in waste oil-based biodiesel, at about 50-50 in order to meet the RFS2's target of 50 percent reductions in GHG emissions compared to conventional diesel.

That sort of blend is downright problematic. WVO, yellow grease and animal fats with their high FFA and high cloud points are not generally considered year-round biodiesel feedstocks at such high blends. Plus, the current estimate of the volume of available waste feedstocks isn't high enough to meet the RFS 1 billion gallon target for biomass-based diesel. Also, the big volumes of waste feedstocks are located in urban areas, far from the big producers of soy-based biodiesel in the Midwest. It defeats the purpose of GHG reductions to ship feedstocks long distances for processing.

The biodiesel industry is marshalling its supporters to make its concern heard loud and clear in the comment period for the proposed rule which ends July 27.

However, there may be a silver lining in that black cloud hanging over the industry. The need for biodiesel producers to improve their GHG reduction numbers could give a big boost to new crops under development. EPA needs to be encouraged, though, to make it possible in the new rule to get a new feedstock approved and rated for GHG impacts in an efficient and low cost manner.

The developers of new feedstock crops have enormous hurdles to clear in introducing a new crop. This week's biodiesel eNewsletter features one of those projects to develop pennycress. The folks developing camelina were among those testifying at the EPA hearing we report on this week as well.

Camelina, pennycress, winter canola and other new oil-bearing crops face an arduous, slow climb to commercial levels if there isn't a solid market for the new crops. All of these new crops are looking to fit in cropping systems without displacing the existing crops. Thus, they should have very low land use impacts, and very high GHG reduction numbers. In theory, that should really boost their market potential. Farmers aren't going to be enticed to grow a new crop in any volume if they have any doubts about being able to sell it to a reliable buyer. And, that reliability isn't going to be judged just by how sound a particular company is, but also by the soundness of the industry is and the market.