Biodiesel

USDA Says Trade Efforts Are Working to Build Markets Abroad

Tue, 21 Nov 2023 20:26:40 GMT

USDA announced last week it is introducing the Regional Agricultural Promotion Program (RAPP) to support continued growth of U.S. agricultural exports and to also introduce U.S. agricultural products to new markets.

The agency will invest $1.3 billion to support that market diversification effort within a public-private partnership with the agricultural sector, according to Alexis Taylor, USDA Trade and Foreign Agricultural Affairs Under Secretary.

Specifically, Taylor told AgriTalk Host, Chip Flory, that RAPP will provide assistance to eligible organizations that conduct market promotion activities, including ones to address existing or potential non-tariff barriers to trade.

Headway In India

Taylor told Flory the Biden administration has tallied numerous trade policy wins in 2023. Some of the key recent wins, she referenced, have been in India, which has been difficult to access with U.S. agricultural goods.

“They have what they would say are 800 million small-holder farmers. Imagine that – more than twice our population in the whole United States,” she said. “They increasingly are looking to develop an industrialized (society) and determine how they move away from subsistence farming to a better economic model. As they’re trying to wrap their arms around how to make that move, using tariffs has been one of the ways they’ve protected their farmers.”

Taylor said USDA has worked closely with India to reduce tariffs and has secured nine tariff reductions in 2023. To date, the agency reports India has dropped retaliatory tariffs on apples, chickpeas, lentils, almonds and walnuts. The Indian government also has reduced tariffs for turkey, duck, blueberries and cranberries.

Steady Progress Cited

Four additional export market successes Taylor and USDA cite as having achieved this year include:
1. Canada approving legislative recognition of U.S. biofuels, maintaining the largest and most dependable export market for U.S. ethanol and biodiesel;
2. Japan renegotiating beef safeguard levels under the U.S.-Japan Trade Agreement, reducing tariffs and generating growth opportunities for $150 million in beef exports;
3. Brazil agreeing not to change import certification requirements, ensuring continued exports of U.S. milk, beef, and seafood; and
4. Mexico granting market access to U.S. potatoes following more than 20 years of engagement.

Looking ahead, Taylor told Flory one of USDA’s key objectives will be increasing the export of U.S. agricultural foods and products to countries in Africa.

“By 2051, one in four people on the planet will live on the African continent, and we cannot ignore this any longer,” she said. “We’re really hopeful that the (RAPP) program will provide some resources for our food and ag sector to be able to invest in some of these areas of the world.”

Taylor’s conversation with Flory, which took place during the annual National Association of Farm Broadcasters Trade Talk program in Kansas City, is available to listen to here:

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Vilsack Focuses on Farm Bill Possibilities with National Sustainable Ag Coalition

Tue, 31 Jan 2023 20:27:48 GMT

USDA Secretary Tom Vilsack on Monday addressed the winter meeting of the NASC, telling members that USDA’s focus has been on developing sustainable food systems through areas like funding an organic transition program and helping farmers turn waste into biofuels.

Vilsack said USDA believes there are more options for farmers other than “get big or get out. There’s got to be a system in which the many and most have a fair shot.”

Read more: Ag Groups File Lawsuit to Challenge EPA’s “Vague” New WOTUS Definition

Vilsack noted the administration’s focus on a “true local regional food system” that he said would be more resilient and less susceptible to foreign conflicts, international trade and production in other countries. He specifically urged state leaders to get more involved.

“Why can’t they invest in value-added opportunities? What’s preventing them from encouraging ecosystem markets in their state? Why aren’t they investing in bio-based product manufacturing and creating opportunities for agricultural waste? How about using some of that money to support local and regional food systems? Maybe they can help with input costs,” Vilsack said.

Read more: Policy and Payments: What Producers Can Expect in 2023

He urged the NSAC members to focus their efforts on educating lawmakers and urged them to push lawmakers to keep expanded funding in place.

“There’s historic money invested in this and there are some people who want to take it away,” he stressed.

Renewable Fuel's Big Week: EPA's RFS Proposal And Year-Round E15 Legislation

Thu, 01 Dec 2022 20:01:51 GMT

EPA, by court order, released renewable fuel blending proposals on Thursday for 2023, 2024 and 2025, as well as information about eRINS for electric vehicles.

The proposed volume requirements come as the agency faced scrutiny on Wednesday and early Thursday for its failure to meet their court-ordered proposal deadline of Nov. 30 in order to finalize by Jun. 14, 2023.

Proposed Volume Targets (billion RINs)

	2023	2024	2025
Cellulosic biofuel	0.72	1.42	2.13
Biomass-based diesel*	2.82	2.89	2.95
Advanced biofuel	5.82	6.62	7.43
Renewable fuel	20.82	21.87	22.68
Supplemental standard	0.25	n/a	n/a

*biomass-based diesel in gallons

“With this proposal, EPA seeks to provide consumers with more options while diversifying our nation’s energy mix,” said Michael Regan, EPA Administrator. “EPA is also focused on strengthening the economics of our critical energy infrastructure, needed to maintain and boost our energy security.”

Regan says his team is “eager” to continue the conversation around the RFS and will do so through public comment.

In replying to EPA’s comment request, the public will offer:

1. How the EPA can better balance the proposed volumes to work for renewable fuel consumers, growers and producers, refiners and workers that operate refining facilities.
2. Ways in which the EPA can “best” support sustainable aviation fuels (SAF) and clean hydrogen.
3. Methods for the EPA to work with domestic oil refining assets and merchant refineries.
4. How to account for incentives offered in the Inflation Reduction Act.
5. Thoughts on qualifying renewable electricity in electric vehicles into the RFS program.

New Regulations in the Works

The electric vehicle proposal in question five is tied to EPA’s latest regulation concept that would “increase U.S. energy security,” according to EPA.

In allowing renewable energy made from renewable biomass into the RFS, EPA says U.S. oil imports would be reduced by 160,000 to 180,000 barrels of oil per year from 2023 to 2025—the length of the proposed rule. The agency says this translates to $200-$223 million in savings each year.

Need for Public Comment

Seth Meyer, USDA chief economist, says these numbers show why the public comment period is “crucial” to the RFS, especially for the ag industry.

“I think for the U.S. biofuels sector, when considering what motor gasoline consumption might be over the next decade, we’re not talking about a growth market by most accounts. We’re talking about a flat to maybe declining market,” says Meyer. “In asking these questions, EPA wants to know how producers can find and contribute to other markets and fuel sectors, like SAF.”

According to Meyer, there tends to be a “big” response to these types of public comment periods. He says agencies often bring in “additional resources” to examine each comment in detail, and get the information tallied in the system.

In Other News

EPA’s RFS news and request for public comment comes as a group of Senators on Wednesday announced bipartisan legislation, the Consumer and Fuel Retailer Choice Act of 2022, that would make E15 blends available year-round.

“We’ve been able to bring critical oil/gas, biofuel, ag, and transportation stakeholders to the table around a common-sense solution,” said Sen. Deb Fischer (R-NE). “With this strong coalition of support, it’s time Congress act to make year-round E15 a reality.”

The U.S. is no stranger to year-round E15, as the Biden administration allowed American’s the option this summer to ease soaring pump prices.

Sen. Chuck Grassley (R-IA) joined AgriTalk Host Chip Flory on Wednesday to break down what sets this bill apart from past ethanol proposals.

“The shocking thing about this bill is that the oil industry supports it because it gives them an opportunity to sell more of their product,” Grassley says.

Grassley believes oil companies also hopped on board with this legislation as:
1. “Several Midwestern governors” having made it clear that E15 will be year-round in their states.
2. Year-round blending will extend the lifetime of liquid fuel availability.

Certainty was Grassley’s biggest concern for the biofuels industry this week. He says he worked to provide that by supporting this E15 legislation, as well as pressuring Regan to “fulfill his promise” for biofuels in the RFS announcement.

More on RFS:

EPA Sends RFS Plans to Next Phase as Nov. Deadline Approaches
EPA’s Small Refinery Exemption Data Under Fire by U.S. Accountability Office

$100 Million Grant to Renewable Fuels Will Bring ‘New Wave of Growth’

Wed, 05 Oct 2022 18:44:12 GMT

Fuel markets began a downward trajectory in late June, with the AAA reporting the U.S.’s average price for regular gas on Tuesday is $3.83, down 49¢ from July.

While fuel prices moved at a rapid pace in 2022, initiatives to alleviate pump prices haven’t moved as fast. One program, however, was finally given the spotlight this week.

The Federal Register published a document on Tuesday that opened the application window for roughly $100 million in grants to “expand” the sale and use of renewable fuels within the USDA’s Higher Blends Infrastructure Incentive Program (HBIIP).

Renewable fuel distribution facilities can now apply for the HBIIP cost-share grants that will aid in converting to higher-blends of:
1. Ethanol—greater than 10%
2. Biodiesel—greater than 5%

Tom Vilsack, USDA secretary, says the funding will strengthen an “important” industry tool to minimize our reliance on other countries.

“Biofuels are homegrown fuels,” Vilsack said. “Expanding the availability of higher-blend fuels is a win for American farmers, the rural economy and hardworking Americans who pay the price here at home when we depend on volatile fuel sources overseas.”

Will the USDA Funds Help?

While HBIIP has a large price tag, will it have an impact? Emily Skor, Growth Energy CEO, says she’s seen fuel grants benefit the renewable industry firsthand.

“We have heard countless success stories from our retail partners about how HBIIP grants have helped them expand options at the pump and bring cleaner, more affordable options to drivers across the nation,” she says. “Today’s announcement reaffirms USDA’s commitment to ensuring a new wave of growth for higher biofuel blends…”

These funds—separate from the $500 million recently enacted through the Inflation Reduction Act —will be used for facility installation, retrofitting and pump upgrades, along with new equipment and buildings.

HBIIP applications will be accepted now through Nov. 21.

More on renewable fuels:
Will the IRA’s Biofuel Provisions Ease Pump Prices? Sen. Ernst Isn’t Convinced
What’s Ag’s Stake in the Senate-Passed Inflation Reduction Act?
New Legislation Could Put E30 on a Pump Near You

Biofuel Fight Lives On

Wed, 11 Nov 2020 05:09:55 GMT

(Bloomberg) -- The price of biofuel blending credits tumbled Friday on mounting speculation that the fight by independent oil refiners to change U.S. laws mandating the use of ethanol will lead to rule changes.

A meeting was said to take place on Friday between Environmental Protection Agency Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue to discuss possible changes to the Renewable Fuel Standard, the law that forces refiners to use escalating amounts of ethanol and biodiesel, according to people familiar with the discussions.

A follow-up meeting is scheduled for the morning of Feb. 27 with President Donald Trump and four Republican senators on both sides of the issue, said the people, who asked not to be named in discussing private deliberations. Pruitt, Perdue and other officials are also expected to be in attendance.

The meetings show that the campaign to change the biofuels mandate is gaining momentum, six months after its fiercest and most outspoken critic, billionaire investor Carl Icahn, left his role as regulatory adviser to the president.

Icahn, who owns an 82 percent stake in CVR Energy Inc., a Sugar Land, Texas-based oil refiner, became the public face of the campaign to reform the 13-year-old law through a series of letters, editorials and interviews in recent years. Icahn served as a regulatory adviser to Trump until August, and his advocacy for changing the RFS while in that role prompted complaints from Democratic lawmakers about potential conflicts of interest.

Federal investigators have issued subpoenas seeking information on Icahn’s efforts to alter biofuel policy during his time advising Trump.

At the center of the debate are tradeable credits known as Renewable Identification Numbers, or RINs, that refiners use to show compliance with the mandate. RINs prices have been volatile in recent years.

On Friday, prices of the credits tumbled as much as 12 percent, according to broker data compiled by Bloomberg.

The dispute intensified last month with the bankruptcy filing of Philadelphia Energy Solutions LLC, the largest refinery on the U.S. East Coast. Companies like PES, Valero Energy Corp. and CVR that lack the infrastructure to blend biofuel and generate the credits themselves must instead buy them from other sellers, including other oil companies as well as traders who have no obligation under the program.

Nevertheless, CVR and other independent refiners may be benefiting from the intensity of the push over the past year to change the program. Prices for RINs tracking 2018 ethanol consumption targets have fallen 37 percent to 62 cents apiece since Oct. 25, according to data compiled by Bloomberg. The biodiesel variety has dropped 26 percent to 80 cents apiece.

The decline is due, in part, to the increased likelihood of legislative reform, Jason Fraser, Valero’s vice president of public policy, said on a Feb. 1 conference call with investors. Earlier that day, Marathon Petroleum Corp. Chief Executive Officer Gary Heminger said that he was “fairly confident” that there will be a resolution by “this spring.”

David Lamp, CEO of CVR, said Thursday he’s “very optimistic something is going to happen,” citing the involvement of ethanol champions Senator Chuck Grassley and Senator Joni Ernst, both Iowa Republicans, and Senator Ted Cruz and Senator John Cornyn, both Texas Republicans.

Copyright 2018, Bloomberg News