It appears that the gloves are off, as an alliance on biofuels forged between US farmers, biofuel producers, and Big Oil is on shaky footing, with lawmakers working to carve out updates to the Clean Fuel Production credit. The industries are at odds over whether the credit, known as 45Z, should be available to producers of biofuels made with ingredients from outside North America, such as used cooking oil from China or tallow from Brazil.
The American Soybean Association and other farm groups praise a Senate measure tightening limits on foreign feedstocks. The bill, matching legislation passed by the US House of Representatives, limits 45Z benefits to producers utilizing renewable feedstocks sourced from the US, Canada, or Mexico.
The Environmental Protection Agency also proposed biofuel-blending rules aimed at suppressing imports by cutting the value of renewable identification numbers, commonly referred to as a RINs, by 50% for foreign-produced fuels and feedstocks.
Meanwhile, the American Petroleum Institute and Advanced Biofuels Association oppose any curbs on international raw materials. The industry trade groups argue that restrictions would increase production costs and, ultimately, lead to higher prices.
“Do we really want to stiff the American consumer?” asked Michael McAdams, president of the Advanced Biofuels Association, a trade group with members including Chevron Corp. and Marathon Petroleum Corp.
The fossil-fuel, biofuel, and farming sectors have rarely seen eye to eye since the Renewable Fuel Standard (RFS) was enacted two decades ago. The mandate forces oil refiners and fuel importers to buy and blend biofuels into the US supply.
However, in recent years, all sides have become more aligned as they recognize how the growing popularity of electric vehicles threatens to reduce consumption of all liquid fuels, whether derived from petroleum or renewable sources, such as row crops and biomass.
That period of cooperation may now be a thing of the past as Big Oil and biofuel interests continue to squabble. Big Oil was also a key campaign funder for the 47th President’s election victory, and his signature “energy dominance” strategy is predicated on promoting domestic production to the fullest extent possible.
For the agricultural world, though, allowing foreign biofuel ingredients into the country unchecked would contradict the President’s pledge to put American farmers first.
“If you want to bring in foreign feedstocks, that’s fine,” said Ed Prosser, who leads government affairs at agricultural commodities trader Scoular Co. “But let’s not have the American taxpayer help you do that.”
Originally shared by Bloomberg. Title and article edited for clarity and purpose.
Photo credit: Pixabay – Anilsharma26
Notice: The Michigan Advanced Biofuels Coalition (MiABC) does not lobby or influence policy in any way. The policy interests of Michigan soybean farmers and biodiesel producers are supported by the Michigan Soybean Association and Clean Fuels Alliance America, respectively.