American Fats and Oils Association Oct. 10, 2013 Larry Schafer Senior Advisor National Biodiesel Board 1
Dec 14, 2015
American Fats and Oils Association
Oct. 10, 2013
Larry Schafer Senior Advisor
National Biodiesel Board
Overview
Government Shutdown. 2013 Production Numbers 2014 RFS Volumes RFS and Congress Tax Incentive Outlook Miscellaneous Issues
Government Shutdown
Disrupting all government operations. Likely to delay rulemaking for 2014 RFS volumes and for Quality Assurance Plans (QAP). Depending on how long it goes on, could significantly disrupt EPA and RFS operations affecting biodiesel producers, including EMTS, permitting, questions, etc.
Government Shutdown Effects on EMTS and CDX
The EMTS will continue to function and all regulated RFS2 entities are required to continue to use it during the shutdown for RIN transactions.
CDX support will not be available for problem resolution. All pending RFS2 registration approvals, proposed pathways and open tickets
will be on hold until the federal government reopens. According to its Oct. 1 contingency plan, of the 16,205 EPA employees, only
909 remain actively working.
2013 Production - Industry Growth
On track for a record year and to exceed 1.28 BG RFS requirement Anticipating some 1.7 billion gallons
Jan. Feb. March April May June July Aug. Total - YTD
Biodiesel 72 MG
77 MG
109 MG 110 MG
135 MG
133 MG
132 MG
148 MG
916 MG
Biodiesel & Renewable Diesel
80 MG
81 MG
129 MG 125 MG
140 MG
151 MG
166 MG
177 MG
1.05BG
2014 RFS Volumes
The EPA has made clear it is planning reductions for 2014: “EPA anticipates that in the 2014 proposed rule, we will propose adjustments
to the 2014 volume requirements, including to both the advanced biofuel and total renewable fuel categories.”
EPA sent proposal to White House Office of Management and Budget (OMB) on Aug. 30. Given the shutdown, we don’t know when the proposal will be published in the Federal Register. Once published we anticipate months of additional review before becoming final next year. Based on 2013 production projections and analysis by NBB RVO Working Group, NBB is advocating a Biomass-based Diesel volume of at least 1.7 BG. However, any increase will be challenging given EPA’s announcement that it is planning reductions, and we will need your help in grassroots advocacy.
2014 RFS Volumes
The EPA has made clear it is planning reductions for 2014: “EPA anticipates that in the 2014 proposed rule, we will propose adjustments
to the 2014 volume requirements, including to both the advanced biofuel and total renewable fuel categories.”
EPA sent proposal to White House Office of Management and Budget (OMB) on Aug. 30. Given the shutdown, we don’t know when the proposal will be published in the Federal Register. Once published we anticipate months of additional review before becoming final next year. Based on 2013 production projections and analysis by NBB RVO Working Group, NBB is advocating a Biomass-based Diesel volume of at least 1.7 BG. However, any increase will be challenging given EPA’s announcement that it is planning reductions, and we will need your help in grassroots advocacy.
2014 RFS Volumes
The EPA has made clear it is planning reductions for 2014: “EPA anticipates that in the 2014 proposed rule, we will propose adjustments
to the 2014 volume requirements, including to both the advanced biofuel and total renewable fuel categories.”
EPA sent proposal to White House Office of Management and Budget (OMB) on Aug. 30. Given the shutdown, we don’t know when the proposal will be published in the Federal Register. Once published we anticipate months of additional review before becoming final next year. Based on 2013 production projections and analysis by NBB RVO Working Group, NBB is advocating a Biomass-based Diesel volume of at least 1.7 BG. However, any increase will be challenging given EPA’s announcement that it is planning reductions, and we will need your help in grassroots advocacy.
Data on 690 million gallons of biodiesel through July 2013 – renewable diesel facilities not included
2014 RFS Volumes
The EPA has made clear it is planning reductions for 2014: “EPA anticipates that in the 2014 proposed rule, we will propose adjustments
to the 2014 volume requirements, including to both the advanced biofuel and total renewable fuel categories.”
EPA sent proposal to White House Office of Management and Budget (OMB) on Aug. 30. Given the shutdown, we don’t know when the proposal will be published in the Federal Register. Once published we anticipate months of additional review before becoming final next year. Based on 2013 production projections and analysis by NBB RVO Working Group, NBB is advocating a Biomass-based Diesel volume of at least 1.7 BG. However, any increase will be challenging given EPA’s announcement that it is planning reductions, and we will need your help in grassroots advocacy.
2013
Volume Requirement
2013 Projected Production
(gallons)
2013 Projected RIN Equivalent
Cellulosic (D3, D7) 6 MG Biodiesel (D4) 1.28 BG 1.7 BG *2.6 B Advanced (D5) 2.75 BG Conventional (D6) 13.8 BG Total 16.55 BG
Source: EPA.*One biodiesel ga l lon generates 1.5 RINs ; so 1.7 bi l l ion ga l lons of biodiesel equals 2.55 bi l l ion RINs
2014 RFS Volumes
The EPA has made clear it is planning reductions for 2014: “EPA anticipates that in the 2014 proposed rule, we will propose
adjustments to the 2014 volume requirements, including to both the advanced biofuel and total renewable fuel categories.”
EPA sent proposal to White House Office of Management and Budget (OMB) on Aug. 30. Given the shutdown, we don’t know when the proposal will be published in the Federal Register. Once published we anticipate months of additional review before becoming final next year. Based on 2013 production projections and analysis by NBB RVO Working Group, NBB is advocating a Biomass-based Diesel volume of at least 1.7 BG.
VOLUME STANDARDS AS SET FORTH IN EISA
(REMINDER: EPA SETS STANDARDS EACH NOVEMBER – THESE ARE THE STANDARDS PUBLISHED IN THE ACT)
RFS Waiver Requests
API and AFPM have filed a waiver petition with EPA to waive the 2014 and reduce the overall volume of the RFS by more than 3 billion gallons.
EPA has the authority to invoke its own waiver – and EPA suggested that the API\AFPM waiver was well crafted – at this time we don’t know if EPA intends to invoke any waiver process, but it is possible they could propose to waive some part of the program.
RFS and Congress U.S. House
Energy and Commerce Committee compiled “white papers” and held hearings exploring RFS concerns. NBB CEO Joe Jobe testified July 23.
Hearings and debate have mostly focused on ethanol. Task Force led by Rep. John Shimkus, R-Ill., is reviewing concerns and
looking at potential legislation. NBB has met with committee and offered our perspective. Too soon to predict if there will be new legislation.
U.S. Senate
Environment & Public Works Committee planning hearing soon – probably after the government shutdown.
Last week, due to the government shutdown the Senate Agriculture Committee cancelled a hearing related to the Energy Title of the Farm bill.
Tax Incentive Outlook
Discussions on comprehensive tax reform continue. Senate Finance and House Ways & Means Committees: • “Blank slate” approach for a “Tax Reform” package
Little movement currently NBB is advocating for a multi-year extension for biodiesel tax incentive. Most likely scenario is another late-year push for tax extenders
RIN Integrity - QAP
EPA continues to meet with stakeholders. Final rule on the proposed QAP rule from April not expected until November/December (depending on Gov’t Shutdown).
Although we expect some changes, it is too early to determine what changes EPA will make to the proposed rule.
Already, obligated parties, biofuel producers, QAP Auditors and others have incorporated retrospective QAP's into their 2013 plans, and we expect the same for 2014.
RIN Integrity - QAP
NBB is pushing for independence in the QAP provider. For Example:• Is buying RINs in the marketplace and holding RINs a conflict of interest for a QAP
provider?• Is it a conflict for an EMTS agent to generate and QAP the same RINs? • The recent EPA Inspector General’s report on EPA RFS2 discussed independence of
QAP providers and Professional Engineers – we anticipate these issues will make it into a final rule.
Biofuel Imports and Exports: • NBB has proposed tighter rules for producers and importers of biofuels and tighter
rules for exporters of biofuels.