Biodiesel Producers Air Concerns About Proposed Cutbacks

Biodiesel producers continue to challenge the Environmental Protection Agency’s plan to cut the volume of renewable fuels next year. At a Thursday hearing, producers told the agency that the planned cutback threatens investments that already have been made and could lead to layoffs.

Biodiesel is a blend of petroleum diesel and fuel made from a variety of sources, such as soybeans, recycled cooking oil and animal fats. Producers make about 2 billion gallons a year, but EPA’s proposal would cut that nearly in half, according to the industry trade group National Biodiesel Board.

The agency is required by law to set annual standards for a wide range of renewable fuels. It has explained that although production of renewables has been increasing, overall gasoline consumption is less than Congress expected when it established the program, and that there are limits to how much ethanol can readily be blended into gasoline.

The volume adjustments it is proposing are aimed at putting the renewable fuels program on a manageable trajectory while supporting growth over time, the agency has said.

But producers are warning that the cutbacks will harm their industry.

“This industry has been running at an annualized rate of about 2 billion gallons since July,” said Anne Steckel, NBB vice president of federal affairs in a statement. “You can’t cut it almost in half and expect jobs and business to survive.”

One producer, Tim Keaveney of HERO BX, said in his testimony that his company is producing a record amount of the fuel, but the planned cutback has forced him to put the brakes on expansion plans.

“We have invested $120 million into our biodiesel refinery with a vision of supporting a green industry, to foster innovation, and to create meaningful jobs,” he said.

“The investment was made in part due to the government’s stance on establishing and supporting renewable fuels. To pull the rug out from under us now would foil current investment and likely stagnate future development.”

EPA will be accepting comments on its proposal for the next two months, and says it is open to alternatives.