Biodiesel Larry Schafer Senior Advisor National Biodiesel Board
Nationwide Production 226 EPA-Registered plants nationwide with over 2.9 Billion GPY Capacity
OEMs Supporting B20+ • New OEM B20 Support Statements in 2012:
Bioheat – The Evolution of Oilheat Bioheat® is a renewable, clean-burning heating oil. Usually blended with standard petroleum heating oil, Bioheat significantly reduces emissions and keeps heating systems running longer than standard heating oil alone. In-home and laboratory testing has shown that the use of Bioheat in a standard home oil burner resulted in a substantial reduction in unburned hydrocarbons, carbon monoxide, and particulate matter compared to emissions from distillate fuels. www.bioheatonline.com
Production by Calendar Year RFS-2 Implemented Biodiesel Tax Credit Extended Volume in Gallons 1.1 Billion Economic Downturn RFS2 Uncertainty Lapse of Biodiesel Tax Credit 691 Million 545 Million 500 Million 315 Million 224 Million 112 Million 2005 2006 2007 2008 2009 2010 2011
2012 Production (Millions of Gallons) EPA EMTS Data MonthDOE EIA Survey (RINS Generated) 555Through June 523 658Through July610 757 Through August ? (DOE through July up 33.26% compared to production over the first seven months of 2011).
Federal Policy • The EPA’s Renewable Fuel Standard (RFS) • The Biodiesel Tax Credit
Renewable Fuel Standard The RFS2 program, implemented in 2010, requires a minimum amount of Biomass-based Diesel (which includes biodiesel, BioHeat, bio-jet and renewable diesel) to be blended with petroleum diesel or aviation fuel: 2009 = 500 million gallons 2010 = 650 million gallons 2011 = 800 million gallons 2012 = 1 billion gallons 2013 = 1.28 billion gallons 2014 = ???
Biodiesel Tax Credit The $1 per gallon biodiesel tax incentive helps reduce costs for consumers and makes biodiesel more cost-competitive with petroleum diesel. The incentive, which was first implemented in 2005, has a proven impact on jobs. It expired on Dec. 31, 2011 and Congress has yet to pass an extension.
Tax Incentive • Aug. 2, 2012 - Senate Finance Committee, with 19-5 vote, passed tax extenders package including the biodiesel tax incentive. • Senate Finance package will serve as baseline for future negotiations and keeps us in good position if Congress can come together around a compromise. • Most likely scenario is for lame-duck legislation.
RFS Waiver Requests Formal waiver petitions to EPA from: • Arkansas Gov. Mike Beebe (D) • North Carolina Gov. Beverly Perdue (D) • New Mexico Gov. Susana Martinez (R) • Georgia Gov. Nathan Deal (R) • Texas Gov. Rick Perry (R) • Virginia Gov. Bob McDonnell (R) (Informal Waiver Requests were from Delaware Gov. Jack Markell (D) and Maryland Gov. Martin O’Malley (D), in additional to several Members of Congress and industry groups who sent letters expressing support for waivers)
RFS Waiver Requests Section 211(o)(7)(A) of the Clean Air Act allows the EPA to waive volume requirements of the RFS in whole or in part if they would severely harm the economy or environment of a state, region or the United States, or if the EPA determines there is inadequate domestic supply of renewable fuel. • Waiver discussion and requests mostly focused on corn ethanol but with implications for biodiesel and other Advanced Biofuel sections of the program. • EPA has opened 45-day comment period for waiver petitions. Deadline for comments is October 11th.
RIN Integrity Issues Congressional Hearing:On Wednesday, July 11, the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations held a hearing titled, "RIN Fraud: EPA's Efforts to Ensure Market Integrity in the Renewable Fuels Program." The hearing featured a lengthy discussion of potential solutions for addressing fraud, including private-sector solutions and the ongoing discussions to restore confidence in RIN markets between the National Biodiesel Board, the petroleum sector and EPA.
RIN Integrity Issues Meetings with EPA, API and AFPM: • The NBB has been in discussions with EPA, API, AFPM, RFA, GE and others since mid-June on discussing a regulatory update to the rule. • NBB’s RIN Integrity Task Force meets every week to discuss latest developments and to promote a steadfast biodiesel position. • Continued discussions with EPA – EPA is considering a number of options, with the goal of having a regulatory proposal on which to comment by the end of the year.
Legal Issues: Cellulosic Biofuel and Advanced Biofuel Volumes • D.C. Circuit Litigation – 2012 RFS • API v. EPA, No. 12-1139 • On March 9, 2012, API filed a petition for review of the 2012 RFS • API’s brief was filed on June 21, 2012, challenging both the cellulosic biofuel volume and EPA’s decision to retain the 2.0 billion gallon advanced biofuel volume requirement in light of the reduced cellulosic biofuel volume • EPA’s brief was filed on August 20, 2012 • NBB intervened in support of EPA on the advanced biofuel issue and, with various other biofuel groups, filed a joint intervenor brief on September 4, 2012 • Intervenors sought to have case dismissed on jurisdictional grounds and defended EPA on the merits of its decision • Briefing is set to be completed by October 9, 2012 • Oral argument is scheduled for December 10, 2012
Legal Issues: Cellulosic Biofuel and Advanced Biofuel Volumes • D.C. Circuit Litigation – 2011 RFS • June 11, 2012: AFPM and WSPA filled a petition for review of EPA’s denial of Petition for Reconsideration and waiver request with respect to the 2011 RFS (Case No. 12-1249) • July 11, 2012: NBB filed motion to intervene in support of EPA • July 23, 2012: EPA moved to hold case in abeyance pending court’s decision in API v. EPA, No. 12-1139, on the 2012 RFS • July 24, 2012: API filed a petition for review of 2011 RFS and EPA’s denial of Petition for Reconsideration and waiver request with respect to the 2011 RFS (Case No. 12-1330) • August 23, 2012: NBB filed motion to intervene in support of EPA • August 24, 2012: API submits statement of issues, which, while non-binding, appears limited to challenging the cellulosic biofuel volume • August 24, 2012: EPA filed a motion to consolidate the AFPM/WSPA and API cases on the 2011 RFS • September 7, 2012: EPA filed a motion to dismiss API’s petition to the extent it seeks to challenge the 2011 RFS rule issued in December of 2010 as untimely • Case has been consolidated with the 2012 RFS Litigation
Thank You Larry Schafer Lschafer@biodiesel.org 202-737-8801 National Biodiesel Board www.biodiesel.org