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Newsline By Doug Lenhart, Executive Director, Procurement and Logistics, Renewable Energy Group Biomass-based Diesel Delivers but Challenges Ahead For the United States (US) biomass-based diesel industry, 2016 proved to be a strong year. Producers conƟnued to deliver high-quality, lower carbon intensity fuel across the country in high volumes. As the industry looks ahead in the new year, it faces many challenges but also opportuniƟes for growth. Blender’s Tax Credit versus Producer’s Tax Credit The Biodiesel Mixture Excise Tax Credit, commonly referred to as the blender’s tax credit, lapsed at the end of 2016. This incenƟve provides $1 per gallon to parƟes that blend biodiesel and/or renewable diesel into the disƟllate pool. This credit also applies to nearly all qualifying gallons blended including those that were produced outside of the United States. The US biomass-based diesel industry supports a switch from a blender’s tax credit to a producer’s tax credit in 2017 and beyond. Switching to a producer’s tax credit benefits American producers, feedstock providers, and consumers in a number of ways. First and foremost, US taxpayer dollars would stop going off-shore to subsidize foreign fuel imports. In 2015 alone, more than $600 million in US tax dollars went to imported biodiesel and renewable diesel. That amount increased in 2016. This money further incenƟvized foreign producƟon that, for the most part, already enjoys subsidies from other countries, whether it is from ArgenƟna’s differenƟal export tax or companies that are parƟally owned by other governments. According to the Joint CommiƩee on TaxaƟon, reforming the tax incenƟve would save US taxpayers $90 million as imports would no longer qualify for the credit and domesƟc producƟon grows. According to the NaƟonal Biodiesel Board, the change would also mobilize domesƟc producƟon. Today, there are 3.1 billion gallons of installed capacity in the domesƟc biomassbased diesel industry that can fulfill growing volumes of this alternaƟve fuel, strengthen energy security, and create new jobs in communiƟes. With fewer imported gallons, the domesƟc industry could expand and beƩer uƟlize exisƟng infrastructure and capacity allowing higher volumes of domesƟcally produced lower carbon intensity products to enter all US markets. Renewable Fuel Standard In November 2016, the Environmental ProtecƟon Agency (EPA) finalized the 2017 renewable volume obligaƟons (RVO) for cellulosic, advanced, and total renewable fuel, as well as the biomass-based diesel minimum volumes for 2018. EPA increased the total advanced biofuel RVO above its proposed 4.0 billion gallons to 4.28 billion gallons, a 670-million-gallon increase over 2016. Biomass-based diesel supplied the vast majority of fuel used to meet the advanced biofuel RVO in 2016 and should conƟnue to do so in the coming years. EPA also confirmed the biomass-based diesel RVO of 2.1 billion gallons for 2018, which is 100 million gallons more than the final 2017 level and 200 million gallons above the 2016 minimum volume. In doing so, EPA stated they believe approximately 2.9 billion gallons of biodiesel and renewable diesel can be produced, distributed, and consumed in 2017. Feedstock Availability As domestic production increases, the demand for rendered fats and oils will conƟnue. In the 2017-2018 final RVO from EPA, there was extensive discussion surrounding the perceived limited availability of qualifying feedstock for growing volumes of biodiesel and renewable diesel. While both the rendering and biodiesel/renewable diesel industries understand that this is not accurate, EPA and other concerned groups must be informed about industry advances and changes in technology that allow more from less. To successfully address this concern would allow for conƟnued growth in volumes finalized by EPA. R Thriving in the California Biodiesel Market Biodiesel has been at the epicenter of California’s low carbon fuel standard (LCFS) since its incepƟon. An even greater boost is coming to the biofuels market with the passage of Senate Bill 32, which requires greenhouse gas emissions reducƟons of 40 percent below 1990 levels by 2030. The California Biodiesel Alliance (CBA) is highlighƟng how businesses can thrive in the state’s flourishing but complex biodiesel market at its sixth annual California Biodiesel Conference on March 1, 2017, in Sacramento. On the heels of the re-adopƟon of the LCFS in 2016, one conference panel will discuss the role of feedstocks and other factors in carbon intensity scoring as well as sustainability and indirect land use change issues and the planned mandatory LCFS enforcement rulemaking. The array of unique and complex policy issues will also be addressed by CBA’s lobbyist and high-level state agency staff from the California Air Resources Board (CARB), the California Energy Commission, and the California Department of Food and Agriculture. Developments in Canada and Oregon will also be discussed. Featured speakers include CARB member Dean Florez and NaƟonal Biodiesel Board Chief ExecuƟve Officer Donnell Rehagen. Conference attendees are welcome to attend an open CBA member meeting after the conference for a discussion of current and future organizational issues and policy directions. More information is available at californiabiodieselalliance.org. R 8 February 2017 Render www.rendermagazine.com


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