Houston (Platts)--25Feb2013/450 pm EST/2150 GMT

Biodiesel producer sources applauded the US Environmental Protection Agency Monday after the EPA finalized its rule to approve camelina oil as a low-carbon feedstock under the Renewable Fuel Standard.

"This decision adds to the growing list of biodiesel feedstocks that meet the EPA's standards for Advanced Biofuel and gives us yet another option for producing sustainable, domestic biodiesel that displaces imported oil," said Anne Steckel, vice president of federal affairs for the National Biodiesel Board, in a statement. "This is important for our energy security, for our economy and for addressing climate change, and we thank the EPA for conducting a thorough and fair review."

The RFS requires a 50% greenhouse-gas emissions reduction for qualifying biomass-based diesel or advanced biofuel. The rule addition -- published on the EPA's website Monday -- adds camelina oil as a new feedstock for biodiesel and renewable diesel blending, which includes jet fuel and heating oil.

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Multiple biodiesel producer sources agreed Monday that the new addition would allow for more possibilities of domestic feedstock blending.

"The more domestic options we have for biodiesel, the stronger the market will be," a source at a major Midwest production facility said. "More options help stabilize the price of SME (soy methyl ester) and FAME (fatty acid methyl ester)."

The producer source said his facility has worked with camelina oil as a possibility. Camelina oil comes from the flowering plant camelina sativa and has been studied extensively as a biofuels blendstock in recent years by the US military.

"It didn't make sense for any large-scale production until it got this approval," the producer source said. "It all depends on the economics, but quality-wise, it works well as a biodiesel. We'd have to run some more additive tests to determine exactly how well."

Soybean oil is the most commonly used feedstock in the US, accounting for about 54% of all biodiesel fuel stocks. Recycled cooking oil and animal fats -- among other biodiesel feedstocks -- also qualify as advanced biofuels under the RFS.

--Jordan Godwin, jordan_godwin@platts.com
--Edited by Richard Rubin, richard_rubin@platts.com

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