U.S. biodiesel companies post record production

Source: Amanda Peterka, E&E reporter • Posted: Tuesday, January 28, 2014

U.S. biodiesel companies produced a record amount of fuel in 2013 on the back of the renewable fuel standard and the reinstatement of a key tax credit at the beginning of the year.

The industry was responsible for about 1.78 billion gallons of biomass-based diesel, compared with the previous record of about 1.1 billion gallons in 2012, according to numbers released Saturday by U.S. EPA. The industry produced about 60 percent more fuel in 2013 than in the previous year.

Biodiesel, an advanced biofuel made from soybean oil, animal fat and used cooking grease, is blended into petroleum diesel to power cars and is used as an alternative to petroleum heating oil. The figure also includes renewable diesel, a green diesel that can be used directly in existing fuel infrastructure without being blended into petroleum fuel.

Through the 2007 renewable fuel standard, EPA each year mandates that the country produce a certain level of biomass-based diesel. Refiners are allowed to meet the target through the use of biodiesel or the purchase of fuel credits; excess production is counted toward an overall advanced biofuel mandate.

Last year’s high production figure, which came after Congress reinstated the $1-a-gallon biodiesel tax credit early in 2013 after allowing it expire for all of 2012, exceeded the biodiesel mandate by about 500 million gallons.

The National Biodiesel Board, a Washington, D.C., trade group that represents biodiesel companies, today applauded the record level.

“The success of the biodiesel industry in 2013 proves that the RFS is working today and stimulating the commercial-scale production of advanced biofuel,” said Joe Jobe, the board’s CEO.

The industry said the high production last year signaled that the Obama administration needs to raise its biodiesel mandate for 2014.

EPA has proposed to keep the target level at 1.28 billion gallons and lower its overall advanced biofuel mandate — an unprecedented move that the biodiesel board worries will squeeze producers and lead to lost production and jobs.

The record production is “proof positive” that the industry can meet a higher mandate, said Anne Steckel, vice president for federal affairs at the National Biodiesel Board. “We did it last year, and we should be able to do it again. We shouldn’t be limited.”

But the White House is worried that the expiration of the tax credit — Congress allowed it to expire again at the end of 2013 — will cause production to plummet, and it has urged EPA to lower the target, according to an analysis of documents from an interagency review of EPA’s proposal (Greenwire, Jan. 6).

The agency is collecting public comments on the proposal until tomorrow; as of yesterday, 15,253 comments had been filed.