US producers blast EPA moves favoring Argentine biodiesel imports

Feb. 4, 2015

The National Biodiesel Board (NBB) sharply criticized a decision by the US Environmental Protection Agency (EPA) to allow streamlined Argentinian biodiesel imports into the United States under the Renewable Fuel Standard (RFS).

“This decision poses a tremendous threat to US industry and jobs, not to mention the overriding goal of the RFS of developing clean, homegrown renewable fuels,” said Anne Steckel, NBB’s vice-president of federal affairs. “This is incredibly damaging, particularly in light of the continued delays in establishing RFS volumes. The Obama Administration has effectively run the US biodiesel industry into a ditch over the past year by failing to establish a functioning renewable fuels policy, and instead of pulling the domestic industry out, it is fast-tracking foreign competition.

“Not only does this threaten US businesses and jobs, it could also undermine our sustainability goals aimed at preventing deforestation from the production of renewable fuels. It opens the floodgates for Argentinian biodiesel with very little oversight or verification that the resources used to make the fuel was grown in accordance with strict RFS sustainability requirements.”

To prevent deforestation and other harmful land-use changes, feedstocks used under the RFS generally must be grown on land that was cleared or cultivated prior to December 18, 2007, when the RFS was implemented. Typically, foreign producers must closely map and track each batch of feedstock used to produce imported renewable fuels.

EPA’s decision allows Argentinian biodiesel producers to use a survey plan for certifying the feedstocks used--in this case soybean oil. The change--effectively leaving it to the foreign producer to pay an independent third party to survey their feedstock suppliers--is far less stringent than the current map and track requirement and more difficult to verify.

Many of the soybeans processed into soybean oil in Argentina come from Uruguay, Peru, Brazil, and other countries. Given the complex international trade involved, the EPA will have little ability to verify the survey plans proposed by Argentinian producers.

NBB estimates that up to 600 million gallons of Argentinian biodiesel could enter the United States as a result of the change. Argentina would be the first country to use a survey approach under the RFS. Canada and the United States operate under an aggregate approach in which feedstock is approved so long as the aggregate amount of agricultural land in each country does not grow.

Additionally, Argentina supports its domestic biodiesel program with a cost-distorting “Differential Export Tax” program that allows Argentinian biodiesel to undercut domestic prices.

“At a time when our US industry needs a lifeline, it feels instead like we’re being pushed back under water,” Steckel said. “This decision simply makes no sense from an economic perspective, an energy security perspective, or an environmental perspective. It is baffling.”

The EPA is more than two years late in establishing volumes under the RFS after failing to establish a requirement for 2014 and 2015. The continued uncertainty under the policy has destabilized the industry, causing many US production plants to stop production and lay off employees.