Letter to Gina McCarthy, Administrator of the Environmental Protection Agency - Renewable Fuel Standard

Letter

The Honorable Gina McCarthy

Administrator

U.S. Environmental Protection Agency

William Jefferson Clinton Building

1200 Pennsylvania Avenue, NW

Washington, DC 20460

Dear Administrator McCarthy:

After significant delays in establishing biodiesel volumes under the Renewable Fuel Standard (RFS), we were pleased to see the Environmental Protection Agency (EPA) recently move forward with a new proposed rule. While the proposal is a positive step for biodiesel, we remain concerned that the proposed biodiesel volumes for 2016 and 2017 fail to adequately recognize the domestic biodiesel industry's production capacity and its ability to increase production.

This new four-year proposal for biodiesel volumes from 2014 through 2017 is a much needed step toward restoring stability and certainty to the domestic biodiesel industry. EPA's actions over the past year have led to tremendous uncertainty and hardship for U.S. biodiesel producers and thousands of their employees. As a result, many plants have been forced to reduce production and some have been forced to shut down, leading to layoffs and lost economic productivity.

While the proposal put forward by EPA is an improvement over the November 2013 proposal, it would only grow biodiesel volumes to 1.9 billion gallons by 2017 which is just slightly more than the industry's actual production of more than 1.8 billion gallons in 2013. We believe the domestic biodiesel industry is fully capable of additional growth and urge the EPA to revise the volumes in the final rule. Based on the biodiesel industry's projections for future capacity, growth, and demand, we believe increases to at least 2 billion gallons in 2016 and at least 2.3 billion gallons in 2017 would be reasonable and prudent.

Congress created the RFS to incentivize domestic production of clean renewable fuels, while still allowing imports to participate in the RFS. As a result, we have seen a steady stream of imported biodiesel participate in the program. Since EPA announced its new proposed rule, imports bound for the U.S. have increased significantly and are expected to keep growing. EPA's decision earlier this year to allow imports from Argentinean renewable fuel producers to participate in the RFS must be taken into account, and biodiesel volumes must be set at sufficient levels to prevent displacement of domestic production.

Biodiesel is the first EPA-designated advanced biofuel under the RFS to reach commercial scale production nationwide. It is exceeding the goals that Congress envisioned when it created the RFS with bipartisan support in 2005, while creating jobs, generating tax revenues, reducing pollution, and improving energy security. We urge you to support continued growth in the domestic biodiesel industry by making reasonable and sustainable increases in the biodiesel volumes for 2016 and 2017 in the final rule.