The Old One-Two
by Ron Kotrba (Biobased Diesel Daily) … The biobased diesel industry took that punch Dec. 1 when U.S. EPA finally released its “set” proposal for the Renewable Fuel Standard.
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Heading into the RFS set process, hopes were high. Many U.S. renewable diesel projects came online in 2022, proving the buildout of this industry wasn’t mere conjecture—it was actually happening.
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Then the punch came—punches really, as it was a vicious combination. For biobased diesel, EPA suggests moving from 2.76 billion gallons in 2022 to 2.82 billion gallons in 2023, 2.89 billion gallons in 2024 and 2.95 billion gallons in 2025. For advanced biofuels, the agency proposes moving from 5.63 billion ethanol-equivalent gallons (3.75 billion biodiesel-equivalent gallons) in 2022 to 5.82 billion gallons in 2023, 6.62 billion gallons in 2024 and 7.43 billion gallons in 2025.
While 7.43 billion gallons sounds like a lot, it’s not—for two reasons. One, remember, that’s ethanol-equivalent gallons, so in biodiesel-equivalent gallons, that’s 4.95 billion. Two, for 2025, EPA proposes to drastically increase the cellulosic biofuel subcategory within the advanced biofuels category to 2.13 billion ethanol-equivalent gallons. Although appreciable volumes of wood-based diesel that might qualify for this subcategory may come online by 2025, that’s not why EPA wants to spike cellulosic biofuel volumes. The agency is doing this to accommodate so-called eRINs for electric vehicles (EVs), manifesting the Biden administration’s clear and obvious bias toward EVs. When the proposed 2025 cellulosic volumes are subtracted from the proposed 2025 advanced biofuel volumes, and the remainder is converted to biodiesel-equivalent gallons, we are talking a little over 3.5 billion gallons—more than half a billion gallons less than the U.S.’s installed operable biodiesel and renewable diesel production capacity in 2022, not to mention hundreds of millions of gallons of qualifying imports and the billions of gallons of additional capacity that will be online in three years. …
To put this all in perspective, just think about four large-scale projects by oil refiners or oil-refiner partnerships that are either online now or soon will be: Diamond Green Diesel’s facilities in Louisiana (690 mgy) and Texas (470 mgy), both of which are now operating; Phillips 66’s Rodeo, California, refinery conversion (800 mgy), scheduled for start-up in 2024; and the Marathon/Neste joint venture (730 mgy) in Martinez, California, planned for operations in 2023. Together, these four sites alone represent 2.69 billion gallons of annual capacity. If EPA’s proposal for the 2025 biomass-based diesel volumes becomes final, these four plants—if operated at capacity—could satisfy 91 percent of that year’s D4 RIN obligations, leaving dozens and dozens of other large- and small-scale renewable diesel and biodiesel producers across the country in the lurch to vie for the remaining 260 million gallons’ worth of crumbs in the RFS subcategory.
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The agency and its proposal are not keeping up with the rapid growth in renewable diesel production—let alone acting as a market-moving mechanism. Others went further. The American Soybean Association said, “These very insignificant volume increases for 2023-’25 realistically could not only stifle growth but also jeopardize the existing biofuels industry.” READ MORE
BIOFUELS INDUSTRY WANTS RVO ADJUSTMENT (Brownfield Ag News)
When it comes to biodiesel, the EPA lacks vision (The Gazette)
The EPA’s assault on rural America and its farmers (Southeast Missourian)
RFS blending mandate ‘makes no sense, disconnected from reality’: biodiesel group (S&P Global podcast)
Clean Fuels, Transportation Industries Ask EPA for Strong Growth in RFS BBD Volumes (Clean Fuels Alliance America)
