Clean Fuels applauds Senate letter urging stronger RFS volumes

Clean Fuels Alliance America applauded a bipartisan letter from 16 U.S. senators April 14 that calls on U.S. EPA to increase volumes for advanced biofuels and biomass-based diesel as it finalizes Renewable Fuel Standard volumes for 2023, 2024 and 2025 by June.

The letter outlines several essential improvements to the rule that are needed to “give farmers and biofuel producers the confidence that the RFS is an EPA priority.”

“The final rule must increase the proposed volumes for advanced biofuels and biomass-based diesel fuels to accurately reflect market conditions,” the senators emphasize in the letter. “The proposed volumes are inaccurate, would shrink the market, put nearly $5 billion near-term investments to increase crush capacity at risk, and destabilize the development of sustainable aviation fuel (SAF). EPA’s proposal sets volumes lower than current blending levels—lower than the added capacity that is coming online in 2023 alone—and is inconsistent with estimates of production.”

A recent analysis by researchers at the University of Illinois and USDA’s Economic Research Service independently confirms a February projection from the U.S. Energy Information Administration that domestic renewable diesel capacity could more than double through 2025 to 5.9 billion gallons.

EPA’s data show that U.S. biodiesel and renewable diesel production increased by more than 500 million gallons in 2022.

The growth is supported by investments of nearly $5 billion by oilseed processors to increase availability of vegetable oils and meal for domestic use.

However, EPA has proposed to keep RFS biomass-based diesel requirements below 3 billion gallons through 2025.

“The clean-fuels industry thanks the bipartisan group of senators for highlighting to EPA Administrator Regan that biofuels lower fuel prices and strengthen economies across rural America,” said Kurt Kovarik, vice president of federal affairs with Clean Fuels. “The biodiesel and renewable diesel industry is providing a crucial supply of fuel that is needed to keep consumer prices in check right now. The growth of the biodiesel and renewable diesel industry is also bolstering confidence among farmers and rural communities for their economic future.”

Kovarik specifically thanked Sens. Amy Klobuchar, D-Minnesota, and Chuck Grassley, R-Iowa, for leading the letter.

In addition to Sens. Klobuchar and Grassley, the letter is signed by Sens. Tammy Baldwin, D-Wisconsin; Sherrod Brown, R-Ohio; Tammy Duckworth, D-Illinois; Dick Durbin, D-Illinois; Joni Ernst, R-Iowa; Deb Fischer, R-Nebraska; Roger Marshall, R-Kansas; Jerry Moran, R-Kansas; Gary Peters, D-Michigan; Pete Ricketts, R-Nebraska; Mike Rounds, R-South Dakota; Tina Smith, D-Minnesota; Debbie Stabenow, D-Michigan; and John Thune, R-South Dakota.

The letter is available for download here.

Last week, Purdue University and CME Group published the Ag Economic Barometer, measuring farmer sentiment for the coming year.

One bright spot in the analysis is the outlook for growth in the renewable diesel and biodiesel industry, which could add value to farm commodities like soybeans.

In November, Clean Fuels published a new study, “Economic Impact of Biodiesel on the U.S. Economy 2022,” conducted by LMC International.

The study finds that based on 2021 market data, the biodiesel and renewable diesel industry produced 3.1 billion gallons and generated $23.2 billion in economic activity, while supporting 75,200 jobs paying $3.6 billion in annual wages in the United States.

For every 100-million-gallon increase in domestic clean-fuel production, the direct, indirect and induced economic activity increases by $1.09 billion and U.S. jobs grow by 3,185.

The largest economic and employment benefits occurred in the farming, oilseed-processing and fuel-production sectors.

The study further calculates that producing 6 billion gallons of clean fuels in the United States would increase overall economic activity from the current $23.2 billion to $61.6 billion and support 187,003 jobs earning $8.8 billion in wages.

The construction of additional capacity would increase economic activity by an added $4.3 billion and support an additional 144,500 related temporary jobs earning $5.8 billion in wages.