The European Union's renewable energy policy would lower U.S. soybean prices. That's according to a soy checkoff study. The study shows the EU's Renewable Energy Directive, which currently excludes biodiesel made from U.S. soybean oil in renewable energy quotas, could decrease U.S. soybean prices by as much as 35 cents per bushel. If left unresolved the regulation could cost U.S. soybean farmers more than $1.1 billion a year.
The checkoff contends the EU's policy unfairly singles out biodiesel made from U.S. soy. It requires all transportation fuels used there to include 10% renewable energy. To qualify as a renewable fuel - it must reduce greenhouse gas emissions by at least 35%. While soy-checkoff-funded research shows biodiesel made from U.S. soy reduces greenhouse gas emissions by between 39% for U.S. soybeans shipped to and crushed in Europe, and 49% for processed U.S. soy biodiesel shipped to Europe, the Europeans claim biodiesel made from U.S. soy only reduces greenhouse gas emissions by 31%. The American Soybean Association is working with the U.S. government to reach an agreement with the EU to include biodiesel made from U.S. soy in the policy. The government is also issuing certificates for all soybean shipments verifying that they comply with U.S. conservation and laws and regulations.
United Soybean Board Immediate Past Chair Marc Curtis notes the EU is the second-largest market for U.S. soybeans. He says the market is at risk because of the Renewable Energy Directive. He says the checkoff study shows how much of an impact the regulation would have on U.S. soybean farmers and will give the U.S. government facts to demonstrate to the European Commission that the regulation needs to be based on sound science.
According to the study, the EU biodiesel regulation would negatively affect the price of U.S. soybeans as well as the cost of shipping U.S. soy to other markets. U.S. soybean farmers currently enjoy a 10-cents-per-bushel advantage over farmers from Brazil and Argentina on soy shipments to Europe, the study shows. However, on shipments to China and India, that shipping advantage over South America drops to less than 3 cents per bushel.