US biodiesel group predicts 1.5 billion gallons or more for 2013 output
Las Vegas (Platts)--5Feb2013/600 pm EST/2300 GMT
The National Biodiesel Board predicted Tuesday that US biodiesel
producers would make 1.5 billion gallons or more this year, easily exceeding
the US Environmental Protection Agency's blending mandate of 1.28 billion
Joe Jobe, the trade group's CEO, told reporters that a number of factors
would help the industry rebound after 2012's unchanged output, including the
restoration of a $1/gal tax credit and EPA's regulatory fix for renewable fuel
The biodiesel group has urged EPA not to lower its 2013 blending mandate
for advanced biofuels, a broader category under the Renewable Fuel Standard.
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"We really believe that we're very well positioned," Jobe told the NBB's
annual conference in Las Vegas. "We've got the capacity. We've got the
feedstock supply. We've got people ready to go. We've got sufficient
On January 31, EPA proposed requiring refiners blend 2.75 billion
ethanol-equivalent gallons of advanced biofuels under this year's RFS, up
from 2 billion gallons in 2012.
But the agency asked for comments on whether it should lower that
mandate, given possible shortages in cellulosic fuel, concerns about Brazil
flooding the US market with imported sugarcane ethanol and other production
EPA said that if it keeps the proposed volume, refiners would have to
find 816 million ethanol-equivalent gallons of advanced fuels on top of the
required 1.28 billion gallons of biomass-based diesel and 11 million gallons
of cellulosic biofuel.
The agency said those additional advanced gallons could easily come from
excess biodiesel production, domestic production sources -- grain
sorghum-based fuel, renewable diesel and biogas -- or from Brazilian
sugarcane ethanol imports.
Jobe said biodiesel has the edge in that bunch, because of the
reinstated tax credit and because EPA assigns each gallon 1.5 Renewable
Identification Numbers (RINs), compared with one RIN for each gallon of
alcohol-based fuel like sugarcane ethanol.
"We are the most economically favorable for that, so we will be filling
some of that market with domestic biodiesel," he said.
EPA said Brazilian imports would need to reach 666 million gallons under
the proposed target if the US biodiesel industry does not outstrip its goal
and if domestic production of other advanced fuels is about 150 million
"We believe that such volumes can be reasonably expected from Brazil
despite some uncertainty in production and export potential," the agency said.
But EPA acknowledged that the projection contained plenty of
uncertainties. A study from the US Department of Agriculture, for instance,
estimates Brazil's total ethanol exports to all countries might only reach
500 million gallons in 2013.
"As a result, it is possible that there could be a shortfall of the
total advanced biofuel requirement in 2013 under these circumstances," EPA
The agency said it wanted to resist lowering the advanced biofuel
requirement given the policy's objective of reducing greenhouse gas emissions
from the transportation sector. "We do not believe it is appropriate to forgo
such benefits when they are physically achievable," EPA said.
Nevertheless, the agency said a paragraph later that there might be
enough uncertainty to warrant a more cautious approach to advanced biofuels
in 2013 and offered the example of cutting the proposal by 200 million
gallons. Industry has 45 days to make its case for keeping or lowering the
The law gives the agency discretion to cut the total advanced biofuels
requirement by as much as it slashes the cellulosic requirement -- 986
million gallons in the case of the 2013 volumes.
EPA asked for comments on whether it should also reduce the 2014
advanced biofuel requirement, set by statute to reach 3.75 billion gallons.
--Meghan Gordon, firstname.lastname@example.org
--Edited by Keiron Greenhalgh, email@example.com