US to import more than 800 million gallons of biodiesel in 2016

Last year the U.S. imported about 670 million gallons of biodiesel and renewable diesel, a record that is soon to be broken, according to Larry Schafer, co-founder of legislative advocacy group Playmaker Strategies LLC and senior advisor to the National Biodiesel Board. Schafer spoke at Christianson & Associates’ Biofuels Financial Conference Oct. 17-18 in Minneapolis, where he said the U.S. is on track to receive more than 800 million gallons of biodiesel and renewable diesel imports this year.

With the blenders tax credit at $1 per gallon, Schafer said essentially only about six companies are responsible for the majority of these imports, meaning just more than a handful of foreign companies are reaping the lion’s share of that $800 million. This is why the U.S. industry has been pushing so hard to reform the biodiesel tax credit to a domestic production credit—to eliminate the nearly $1 billion in U.S. taxpayer subsidization of foreign biodiesel and renewable diesel production.

Schafer said the U.S. is on track to consume about 2.5 billion gallons of biodiesel and renewable diesel in 2016, up markedly from 300 million gallons just six years ago.

The EPA has proposed a 100 MMgy increase in the biomass-based diesel portion of the RFS for 2018, from 2 billion gallons in 2017 to 2.1 billion in 2018. “What we want is 2.5 billion gallons,” Schafer said, speaking on behalf of the NBB.

But it’s not just an increase in the biomass-based diesel standard NBB wants. For 2017, EPA has proposed an advanced biofuel total of 4 billion ethanol-equivalent gallons, or 2.67 billion biodiesel-equivalent gallons.

“It’s hard for us to see this as growth,” Schafer said, considering this will be essentially achieved in 2016. “We view it as a step back.” Schafer told the audience that NBB is advocating for a 2017 advanced biofuel standard of 4.75 billion ethanol-equivalent gallons.

The final RFS rule is nearing release, Schafer added, indicating that it is currently, or will soon be, on its way to the White House’s Office of Management and Budget for interagency review. “Some senators will soon be meeting with EPA officials and a few in the biodiesel space,” Schafer said.

The industry and key legislators are also bullish on extension of the biodiesel tax credit, whether this is reformed as a producers credit or renewed as a blenders incentive again.

“Sen. [Mitch] McConnell has said good things about passage of a tax extenders package,” Schafer said. “The Senate has taken a strong position on [reforming the credit] this year and last year.” Step 1, Schafer said, is to move forward on an extenders package, and Step 2 is to gain or retain strong advocates in favor of reforming this to a domestic production credit.

Rep. Collin Peterson of Minnesota also spoke at the event on the biodiesel tax credit and said, “I think we’ll get it extended again this fall.”

Stay tuned to www.BiodieselMagazine.com for more biodiesel-related content from the Biofuels Financial Conference this week.