Illinois Farmers Should Be Pleased With EPA's Findings on Biodiesel

ISA is working to put the biodiesel tax incentive back in place.

Published on: Feb 8, 2010
Soy biodiesel can indeed achieve significant Greenhouse Gas emissions relative to petroleum diesel.

In its Renewable Fuel Standard Program (RFS2) Final Rule issued recently, the Environmental Protection Agency found that all soy biodiesel exceeds the 50% reduction threshold needed to qualify for the RFS2 biodiesel mandate. The same is true with inclusion of questionable indirect land use variables.

"We are pleased with the favorable outcome of the ruling. We have been working for awhile to correct flaws in the original RFS2 Proposed Rule issued in 2009," says Ron Moore, Illinois Soybean Association chairman from Roseville. "Demand for domestically produced soybean oil and the future of the biodiesel industry in the United States hinged on solid findings and the ruling was of particular importance to Illinois soybean farmers."

Illinois is the nation's largest biodiesel consumer. Trucks in Illinois powered with biodiesel logged more than a billion miles last year.

"B11 (11% biodiesel) is the most commonly used blend in Illinois because the state legislature created tax benefits for those who sell and use biodiesel blends above 10%," Moore says. "B11 offers comparable cost to #2 diesel fuel and increased benefits for consumers."

Thousands of comments generated during the EPA's comment period provided extensive information for the agency to consider. ISA, other state soybean organizations, the American Soybean Association and the biodiesel industry, were able to demonstrate that some of EPA's initial calculations regarding direct and indirect emissions were significantly flawed. The groups also showed that the EPA had used questionable indirect land use assumptions.

Under the final rule, EPA requires combined 2009 and 2010 volume levels to be met, which translates into 1.1 billion gallons of biodiesel use by the end of the year. Agricultural feedstocks produced in the U.S. are in compliance, and no additional certification is needed unless the baseline level of approved land is exceeded. EPA requires certification for foreign feedstock.

While EPA's RFS2 final rule is a victory and critical to the future of the biodiesel and soybean industries, production remains in peril. Moore says Congress also needs to extend the national biodiesel tax incentive. ISA will continue to focus on getting the incentive back in place quickly.

"The tax incentive just expired on December 31," he says. "Expiration has essentially caused the production and use of biodiesel in the U.S. to cease. It has placed 23,000 jobs supported by the domestic biodiesel industry in immediate jeopardy. Companies have already started laying off employees. The situation is certain to worsen the longer the tax incentive is allowed to lapse."