U.S. Biodiesel Industry Stands Ready to Meet, Exceed RFS2 Volume Goals

As the head of the National Biodiesel Board's Washington office, I have the privilege of working with biodiesel producers and stakeholders from across the country. Over the past year, regardless of their size or business model, I have heard a common sentiment from biodiesel producers. The biggest challenge facing our industry is uncertainty. Unreliable, inconsistent federal policy and the marketplace volatility it has caused is making it nearly impossible for our industry's entrepreneurs-the very individuals responsible for producing America's only commercial advanced biofuel-to make the important business decisions that will allow the nation to recognize significant economic, energy security and environmental benefits associated with expanded biodiesel production and use.

That is why the renewable fuels standard, RFS2, is so important. Between now and 2022, RFS2 requires obligated parties to use minimum amounts of biomass-based diesel and other advanced biofuels each year. Successful implementation of the RFS2 biomass-based diesel and advanced biofuels requirements will help provide a stable, reliable and enforceable demand for biodiesel in the U.S. marketplace. For this reason, the NBB has spent a significant amount of time, effort and resources working initially with Congress and subsequently with U.S. EPA to create and implement a workable program that achieves the worthwhile policy goal of displacing petroleum with advanced biofuels such as biodiesel.
On July 20, the EPA issued a proposed rule regarding the 2011 volume requirements for biomass-based diesel. Consistent with the law, the EPA proposed that 800 million gallons of biodiesel must be entered and used in the commercial marketplace in 2011.

In comments NBB filed on August 18, we supported this requirement and agreed with EPA that the U.S. biodiesel industry can not only meet, but exceed, 800 million gallons of production in 2011. With more than 80 biodiesel plants registered under the RFS2 program, representing more than 1.8 billion gallons of production capacity, and the abundance of feedstock available, the U.S. biodiesel industry stands ready to produce the fuel needed to satisfy and surpass the RFS2 volume requirements for 2011 and beyond.

The NBB also took the opportunity in these comments to clarify the fundamental fact that, by law, the RFS2 volume requirements for biomass-based diesel and advanced biofuels must be met regardless of the status of the biodiesel tax incentive or other biofuels tax incentives. There has been some confusion about this issue, and we specifically noted the following in our comments:

"In any event, although obligated parties continue to highlight the lack of the tax credit as a reason to avoid using biodiesel for compliance purposes in 2010, the tax credit itself is not germane to the specific statutory volume mandates of the RFS2 program enacted by Congress. The presence of the biodiesel tax credit should not be part of EPA's consideration when setting the annual renewable volume obligations. Specifically, Congress did not create the RFS2 volume requirements contingent on the availability of tax credits for biofuels, rather Congress created the RFS2 and imposed the volume requirements for a multitude of reasons: to decrease reliance on petroleum; to increase the environmental and air quality benefits of transportation fuels; to create new domestic green jobs; and to stimulate the development of new domestic feedstocks for biofuels."

The EPA has clearly taken a step in the right direction by acknowledging that the U.S. biodiesel industry has the production capacity and feedstock available to accommodate the proposed RFS2 volume goal of 800 million gallons for 2011. The U.S. biodiesel industry has done, and will continue to do, its part to fulfill the statutory directive and goals. The NBB is confident that the U.S. biodiesel industry will produce more than 800 million gallons of fuel in 2011, so long as the EPA finalizes and enforces this proposal in a timely manner.
Successful implementation and enforcement of the RFS2 biomass-based diesel and advanced biofuels volume requirements will provide needed certainty for the U.S. biodiesel industry. Rest assured, achieving this worthwhile goal has been, and will remain, a top priority for the NBB.

To view the comments filed by the NBB, please visit www.regulations.gov and look through Docket ID. No. EPA-HQ-OAR-2010-0133.

Manning Feraci, vice president of federal affairs, National Biodiesel Board