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Biofuels Bulletin By Tina Caparella EPA Holds Firm on 2014 Biodiesel Mandate In mid-November, the United States (US) Environmental Protection Agency (EPA) released for public comment its proposed 2014 Renewable Fuel Standard (RFS) mandates. The numbers reflect the first-ever reduction in the “renewable volume obligation” for biofuels blended with gasoline and diesel as required by Congress under the Energy Independence and Security Act of 2007. Specifically, the biomass-based diesel volume, which is biodiesel and renewable diesel, is proposed to remain at the 2013 requirement of 1.28 billion gallons. As of September 30, 2013, EPA reported 1.1 billion gallons of biodiesel had been produced. The biodiesel industry predicts it is on pace to produce a record 1.7 billion gallons this year. The agency said it took the unprecedented action of reducing the volume because of the “E10 blend wall,” the point when the petroleum industry, facing reduced gasoline demand, must blend biofuels with gasoline at higher percentages than the current 10 percent rate in order to meet its RFS obligation. “If gasoline demand continues to decline, as currently forecast, continuing growth of ethanol will require greater use of higher ethanol blends such as E15 and E85,” EPA stated in a news release. The National Biodiesel Board (NBB) immediately voiced its disappointment. “The growth in domestic biodiesel production dovetails exactly with President Obama’s statement in July of this year that ‘biofuels are already reducing our dependence on oil, cutting pollution, and creating jobs around the country,’” said Anne Steckel, NBB’s vice president of federal affairs. “This is why EPA’s action today is so surprising and disappointing.” According to NBB, the proposed volume is particularly challenging because excess biodiesel production in 2013 can be carried over for compliance into 2014. As a result, the 1.28 billion gallon proposal could mean an effective market closer to one billion gallons – a dramatic reduction from current production. “Our industry has been running recently at 170 million gallons per month – an annualized rate of two billion gallons,” Steckel said. “This proposal could nearly cut that in half. We will continue urging the administration to improve this rule before it becomes final.” The 2014 RFS proposal for all renewable fuels is 15.21 billion gallons, based on a range of options from 15 to 15.52 billion gallons. This compares with the statutory requirement of 18.15 billion gallons. A breakdown of the fuel numbers reveals the conventional biofuel volumetric mandate – the category that includes corn ethanol – is proposed at 13 billion gallons, down from the statutory level of 14.4 billion gallons. The total for cellulosic ethanol is proposed at 17 million gallons based on a range of seven to 30 million gallons. The renewable volume obligation for advanced biofuels is proposed at 2.2 billion gallons, based on a studied range of 2.0 to 2.51 billion; for biomass-based diesel (biodiesel/renewable diesel), the total proposed is 1.28 billion gallons. NBB has pushed the administration to set the biomass-based diesel at 1.7 billion gallons, roughly 2013 production. Public comments on the proposed rule will be due 60 days after it is published in the Federal Register, which was expected in late November. Just prior to EPA’s announcement, NBB released a study that shows the biodiesel industry supported more than 62,000 jobs and $2.6 billion in wages in 2013. The study found if EPA were to limit 2014 RFS requirements to 1.28 billion gallons, the number of supported jobs would drop to 54,500, with supported wages falling below $2.3 billion and total economic impact reduced to $12.2 billion. The study was commissioned by NBB and conducted by LMC International, a global economic research firm. A bipartisan group of US Senators joined NBB’s plea by sending a letter to the Obama administration supporting reasonable growth in the biodiesel industry next year under the RFS. The 32 senators, representing biodiesel production plants from Washington to Minnesota to Maine, specifically called on the administration to establish a volume requirement of at least 1.7 billion gallons, consistent with this year’s projected production. The letter was led by Senators Patty Murray (D-WA), Al Franken (D-MN), Roy Blunt (R-MO), and Chuck Grassley (R-IA) and warned that a weakened RFS could lead to plant closures and thousands of lost jobs while threatening future investment. “Biodiesel has exceeded RFS targets in each year and is clearly poised to do so again in 2013,” the senators wrote. “Biodiesel is improving our energy security by reducing our dependence on imported petroleum diesel, diversifying fuel supplies, and creating competition in the fuels market. Setting the 2014 biodiesel volume requirement at reduced levels could have severe impacts on the domestic biodiesel industry.” Biodiesel is the first and only commercial-scale fuel produced across the United States to meet EPA’s definition of an advanced biofuel, meaning the fuel reduces greenhouse gas emissions by more than 50 percent when compared with petroleum diesel. Produced in nearly every state in the country, the industry has exceeded RFS requirements every year of the program, producing more than one billion gallons annually since 2011. Croatia to Get First Biodiesel Plant BDI – BioEnergy International AG, based in Austria, has entered into a contract with Biom D.O.O. to construct the first multi-feedstock biodiesel plant in Croatia at a cost of more than 20 million euros ($27 million USD). Total capacity of the plant will be about 100,000 metric tons per year (30 million gallons) with start-up anticipated by the end of 2014. Vesna Trnokop- Tanta, a representative of the Croatian Chamber of Commerce, 24  December 2013  Render www.rendermagazine.com


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