Biodiesel imports cost U.S. jobs — study

Source: Marc Heller, E&E reporter • Posted: Tuesday, July 5, 2016

American biodiesel producers continue losing ground to imports, said a study commissioned by an industry group critical of the growing influence of foreign producers.

Consulting firm LMC International Ltd. said biodiesel imports may have cost the U.S. industry as many as 21,000 jobs in 2015. The National Biodiesel Board commissioned the research.

The findings mesh with the Biodiesel Board’s view that importers shouldn’t be eligible for a federal biodiesel tax credit.

By converting the credit from a blender’s credit to a producer’s credit, Congress could limit the incentive to biodiesel produced here, the Biodiesel Board has said.

In addition, the Biodiesel Board wants U.S. EPA to set higher biodiesel levels in the renewable fuel standard, said a board spokesman, Ben Evans.

The agency has proposed 2 billion gallons of biodiesel for 2017, out of 18.8 billion gallons overall for renewable fuels.

The tax credit divides alternative fuel advocates. The Advanced Biofuels Association, which represents some importers, supports keeping the credit as it is, offered to blenders.

Under the status quo, the credit encourages competition and recognizes that biodiesel is part of a global supply chain, the ABA has said.

In the study, researchers said the U.S. biodiesel supply of 2.1 billion gallons in 2015 had an economic impact of $8.4 billion, supporting 47,400 jobs.

But the research said the numbers would have been higher had all 2.1 billion gallons been produced in this country. About 1.43 billion gallons was domestically produced, the study said.

If U.S. producers had supplied all 2.1 billion, the economic impact would have been $12.4 billion, supporting 68,600 jobs, according to the study.

Imports started to surge in 2013, thanks to global and U.S. trade policies that favored purchases of biodiesel from Argentina, said the study.

“A move toward greater self-sufficiency in biodiesel sourcing and away from imports could have tremendous positive ramifications for the U.S. economy — ones that will only grow with market size,” researchers said.

Although biodiesel supporters are pushing for greater mandates and say current production is well short of capacity, EPA raised doubts in its 2017 fuel blends proposal about the industry’s ability to supply much more.

EPA said mandating a level of 5 billion gallons, for instance, would stretch the industry’s distribution capability. Imports likely couldn’t make up for domestic shortages, EPA said, given that they’ve been a relatively small part of the U.S. supply.