Tell EPA its RFS2 Proposed Ruling is Fatally Flawed

By Ron Kotrba | June 09, 2009
The controversial issue of EPA's proposed RFS2 rule, especially the curious science behind methodologies of indirect land use change and greenhouse gas (GHG) reductions, continues to play out. Several key elements of the debate, such as the definition of renewable biomass, producers' new burden of proof, and the grandfather clause, have become extremely important-in fact, it could be said that the fate of the U.S. biodiesel industry rests in such seemingly harmless phrasings and terms. But be assured there is no resting going on.

There is a huge, concerted effort underway right now to convince EPA how flawed its calculations and assumptions on indirect land use change really are. To think that renewable fuels are the only products to ever have to meet such criteria is disturbing. As one source put it, the idea of blaming the destructive farming practices occurring halfway across the world on Iowa soybean oil being made into biodiesel is absurd, and cannot be allowed to be part of legitimate national policy. Clearly, the debacle last year of food versus fuel and the hysteria created by rising food prices only set the stage for all of this, and that hysteria has infiltrated the Beltway in such a way as to affect policymakers. But perhaps the fact that this issue has come to a head now is, in the long run, doing the biodiesel industry a favor because the issue will be fought out today rather than later.

To think, however, that other industries-livestock and food producers, oil explorers and refiners, etc.-do not need to meet the same criteria is appalling. After all, the myriad of food producers putting out nutritionally worthless snack products, on which food companies spend millions and millions of dollars to advertise to children, get a free pass on accountability; while the biodiesel industry, which is trying to play a major and important role in creating an energy-independent United States and more sustainable global energy environment, has to jump through these ridiculous hoops. Even European nations such as Germany, which are elders compared to the U.S. in terms of enacting environmental policy, do not wish to touch the sketchy issue of indirect land use change. Also, extraction of crude petroleum oil from alternative sources such as the shale sand tars is extremely energy intense. Will this be discouraged by pending GHG reductions? Maybe.

An interesting chart accompanying National Biodiesel Board CEO Joe Jobe's column in this issue's Inside NBB section shows that while U.S. biodiesel production has significantly increased from 2004 to 2008, Brazilian soybean acreage declined. Is this proof that indirect land use change does not exist? No, but it may show exactly what NBB wants EPA to see-that the methodology behind its indirect land use change is erroneous.

Here are some of the finer points, found in the 2007 energy bill and/or the EPA's proposed RFS2 rule. According to EPA members, "renewable biomass" is defined as feedstock grown on agricultural land that must have been cleared or cultivated prior to Dec. 19, 2007-the date on which the 2007 energy bill and its RFS2 was signed into law. That land must also be actively managed. Woody biomass from federal lands is not allowed except from wildfire areas. Slash and pre-commercial trimmings from forestland are allowed as long as the forestland is non-federal and not ecologically sensitive as determined by state natural heritage programs.

There is a new "burden of proof" to consider. This means that all biofuel producers, as laid out in the proposal, must document the origin of its feedstock-a daunting if not impossible task. To generate any kind of renewable identification number (RIN) credits under the proposed RFS2 rule, a producer must have the history of its feedstock that meets the renewable biomass definition. According to EPA, this is regardless whether that feedstock meets the definition of renewable biomass. So, if Company X chooses not to assign a RIN to a gallon of fuel it produces, the RFS2 proposal, as it exists today, states that EPA will require documentation proving that the feedstock came from lands that were not in cultivation prior to Dec. 19. The proposal would also require foreign producers to register, report and maintain similar records just like the domestic producers.

The grandfather clause-seemingly the only mildly positive part of EPA's proposed ruling-states that all of the biodiesel plants in production or under construction before Dec. 19 2007 are considered grandfathered in. This means that they don't need to meet GHG reductions-even plants purely using virgin oils-nor do they need to prove their feedstock is "renewable biomass." The catch, however, is that they won't be able to generate biomass-based diesel RINs, only general renewable fuel RINs, which would go toward the 15 billion gallon general "renewable fuel" category in RFS2, same as corn ethanol.

If you are reading this, you have a vested interest in the survival of the biodiesel industry. Make your voice heard and provide EPA with the vital feedback needed to help it find a reasonable synthesis between sound environmental policy and allowing the biodiesel industry a chance at survival and prosperity.

Ron Kotrba
[email protected]
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