On Nov. 21, the U.S. Environmental Protection Agency (EPA) announced that the 2014 Required Volume Obligations (RVO) for the Renewable Fuel Standard (RFS) will not be finalized this year. Instead, the EPA will take action in 2015 prior to or combined with the rulemaking for the 2015 RVO standards.
The continued delays related to the RFS create great uncertainty for the biodiesel industry and vegetable oil and oilseed markets. The EPA previously issued a proposed rule to set the 2014 RVO for biomass-based diesel at 1.28 billion gallons, which is below the amounts actually produced and consumed in 2013. The U.S. Canola Association (USCA) submitted comments on that proposed rule in January 2014, urging the EPA to increase the biomass-based diesel volumes for 2014. The preferred outcome for canola growers and the biodiesel industry would be for the EPA to finalize the biomass-based diesel volumes at or above the nearly 1.8 billion gallons produced and consumed in 2013. The USCA will continue to work with the National Biodiesel Board and industry partners to secure appropriate and beneficial biodiesel RFS volume requirements from the EPA and Obama administration.
As of October, total biomass-based diesel utilization, including imports, under the RFS was estimated at 1.4 billion gallons – already exceeding the 1.28 billion gallon level in the proposed rule. However, volumes can be carried over to the following year, so a final rule from the EPA for 2014 and 2015 is still important. Production for these years will also be significantly impacted by the outcome of the tax extenders package that is currently under consideration during the lame duck session of Congress. All USCA members are urged to contact their Congressional offices in support of this package, which includes a two-year extension of the biodiesel tax credit.