Last week, the Environmental Protection Agency released its final Renewable Volume Obligations for 2023, 2024, and 2025, which sets annual biofuel blending targets under the Renewable Fuel Standard. Soy growers are disappointed with the rule, as it does not accurately reflect the growth expected in the industry and falls far below the industry’s current production.
For the first year of the rule, EPA did not make any increases to the biomass-based diesel category over the totals reflected in the draft rule released in December, despite ASA and others in the BBD industry sharing data demonstrating that the sector saw significant growth. For the years 2024 and 2025, EPA made only modest increases in the BBD and non-cellulosic advanced biofuels categories. EPA acknowledged that some of this growth resulted from updated feedstock availability projections based on data ASA shared.
“This announcement is a letdown for soy growers. It threatens the success of the biomass-based diesel industry by significantly dialing back annual increases in volume obligations and failing to account for the progress being made in biofuels investment and growth,” said ASA Daryl Cates (IL) in a media release from the organization.
BBD is a vital domestic market for soybean farmers. The RFS has reduced U.S. dependence on foreign oil, reduced greenhouse gas emissions, and added value by increasing demand for soybeans and corn. Billions of dollars are being invested in biodiesel, renewable diesel, soybean crushing plants and other infrastructure to be able to produce more BBD.
EPA’ modest blending requirements for trucking fuel could now upend projects that were expected to more than double production capacity of renewable diesel. ASA shared with the Wall Street Journal that, prior to EPA’s December 2022 RVO proposal, plans were made for 21 new or expanded soybean crush facilities that would increase the country’s crushing capacity by more than 30%, far above EPA’s projected three-year RVO growth. The EPA final rule has put some of those facilities on hold.
Soy farmers were encouraged by EPA’s 2022 volume target—which included the highest-ever number for total renewable fuels and specifically for biomass-based diesel since the renewable fuel standard was created—and were hopeful EPA would continue its support of the RFS. However, EPA’s final rule will limit growth in soy-based biofuels over the next three years and leaves farmers and biofuels industry partners with concerns. Read ASA’s release here.
