The National Biodiesel Board (NBB) condemned the Environmental Protection Agency’s granting of 31 retroactive small refinery exemptions for 2018 as a fundamental failure to uphold the Renewable Fuel Standard (RFS).
“Less than two months after vowing to always protect and defend American farmers, President Trump is bowing to oil industry pressure and allowing his EPA to dismantle the Renewable Fuel Standard program, force U.S. biodiesel producers out of business, and undermine the farm economy,” stated Kurt Kovarik, NBB’s Vice President of Federal Affairs. “EPA and administration personnel are well aware that the ongoing spree of big oil exemptions destroy demand for biodiesel and render the RFS program meaningless.”
According to University of Illinois economist Scott Irwin, virtually all of the demand destruction from small refinery waivers is falling on the biodiesel industry. As EPA continues to hand them out to every refiner that asks, the damage to the U.S. biodiesel and renewable diesel industry could reach $7.7 billion or 2.54 billion gallons, according to Irwin.
A small refinery processing 75,000 barrels of oil per day can produce nearly 1 billion gallons of gasoline and diesel per year. The refinery’s annual RFS obligation would create demand for nearly 20 million gallons of biodiesel or renewable diesel, which are the most widely available advanced biofuels. Dozens of biodiesel producers across the United States produce less than 20 million gallons each year.
Kovarik continued, “Biodiesel producers are already shutting down facilities and laying off workers, due to loss of demand. The ongoing demand destruction will undercut the industry’s investments and choke off markets for surplus agricultural oils, adding to the economic hardship that farmers are facing. The Trump administration’s action represents a fundamental betrayal of previous promises to farmers and the agricultural economy.”