Advanced BioFuels USA

by Tyne Morgan (AgWeb) … The policy priorities for ASA differ year to year, but the excitement around biomass-based diesel and renewable diesel kicked into high gear during Commodity Classic last year. A year later, Censky (Steve Censky, American Soybean Association CEO) says soybean farmers are concerned with what EPA’s recent RFS proposal could do to that potential demand. 

As soybean growers look at possible growing demand at home from the push for more biofuels and renewable diesel, Censky says EPA’s recent RFS proposal does the opposite, calling the renewable volume obligations (RVOs) within the proposal “extremely disappointing.”

“It basically flatlines our industry over the next several years. It doesn’t take into account the significant growth that’s happening in the soybean crush sector,” says Censky. EPA’s announcement in early December set the proposed RVO for biomass-based diesel at 2.82 billion gallons for 2023, with an increase to 2.95 billion gallons in 2025.  

ASA says that would only cover a fraction of planned production in the U.S. Censky points out there are currently 20 major expansions or new plants underway for soybean processing in the U.S., which would increase U.S. soybean processing to 7 billion gallons of production. That’s an increase of nearly one-third from today, and short of the 2.95 billion gallons supported by EPA’s RFS proposal. 

“That’s going to produce and that’s driven by the demand that that we had thought was out there for renewable diesel and biodiesel. And unfortunately, EPA proposing to pull the rug out from under that investment,” says Censky.

Last week, ASA met with EPA Administration Michael Regan, and Censky says they delivered a clear message to EPA: the current RFS proposal would be bad for farmers, rural jobs and rural development. Censky claims soybean crush facilities who are still in the early stages of plant expansions or creation, are now worried EPA’s recent announcement threatens their investments.

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When asked why EPA and the Biden administration aren’t looking at things like renewable diesel to meet their short-term climate goals, Censky says there’s still a thought that increased demand for oils will drive food prices higher. But Censky says a recent study from Purdue University found the opposite, that the increased soybean meal would actually help drive down the overall cost of food.

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Censky says the first priority is to fully protect crop insurance, as he says that’s soybean farmers most important risk management tool. The other priority is to improve the safety net for soybeans.

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Within the Farm Bill, ASA also would like to see:

• A doubling of the market access program (MAP) and foreign market development funds; funding for those programs has been stagnant for 20 years, Censky says.
• Voluntary conservation measures that focus on working lands.

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Censky says Southeast Asia is one ASA views as a high growth market. He also thinks soybeans could also see a surge in demand if a trade agreement was reached with that area, allowing market access to countries like Vietnam, Thailand, Indonesia and the Philippines.  READ MORE

Escalating Demand for Soybean Oil Hits Possible Slowdown: EPA regulations could limit the use of the legume byproduct in biofuel (Wall Street Journal)