Biodiesel Producers Cutting Back Due to Uncertainty

nbb-advancedNearly 80 percent of biodiesel producers nationwide have cut back or idled production this year, due to uncertainty in policy coming out of Washington, D.C. A new survey from the National Biodiesel Board shows that a weak Renewable Fuel Standard (RFS) proposal from the Environmental Protection Agency (EPA) and Congress’ failure to extend the biodiesel tax incentive is also behind the drive by two-thirds of the producers to cut their workforces as well.

“Inconsistency in Washington is wreaking havoc on the U.S. biodiesel industry,” said Anne Steckel, NBB’s vice president of federal affairs. “It’s not just hurting these producers. It is a setback for local economies where these plants operate, for our environment, for our national energy security, and for drivers who are tired of ever-increasing fuel prices that result from the petroleum industry’s monopoly at the pump.”

Among the other survey findings:

78 percent have reduced production versus 2013
57 percent have idled production altogether or shut down a plant this year
66 percent have reduced workforce or anticipate reducing workforce
85 percent have delayed or canceled expansion plans

The producers nearly universally attributed the industry decline to the weak RFS proposal and loss of the tax incentive.

NBB also attended a news conference in Washington today, where six U.S. Democratic Party senators, along with some biodiesel producers from across the country, blasted the Obama Administration for the EPA proposal, as well as the congressional inaction (we’ll have more on what they had to say tomorrow).

asteckelAfter the senators’ and producers’ remarks, Anne told me while the policy has been uneven and caused the uncertainty for producers, she is appreciative of the steadfast support from the lawmakers at today’s event.

“It’s a strong support of biodiesel, and I think that bodes well for us, as we look for EPA to make this final decision on raising the RFS volumes for biodiesel. We’re very hopeful that this strong support will resonate with the Administration,” she said.

Listen to what Anne had to say after the news conference: Anne Steckel, NBB’s vice president of federal affairs

Biodiesel By-Product Innovation Award Announced

Glycerine Innovation Award2Research that looks to overcome roadblocks to innovative uses for the biodiesel by-product, glycerin, has been honored. The National Biodiesel Board and the American Cleaning Institute presented their 2014 Glycerine Innovation Award at the American Oil Chemists’ Society’s annual meeting.

The 2014 honoree is Dr. Xiaofei “Philip” Ye, Associate Professor at the University of Tennessee’s Department of Biosystems Engineering & Soil Science. The ACI/NBB Glycerine Innovation Award recognizes outstanding achievement for research into new applications for glycerine, with particular emphasis on commercial viability.

Dr. Ye undertook his research in response to the rapid growth of the biodiesel industry worldwide resulting in the production of large amounts of glycerine, creating an urgent need to quickly and effectively convert crude glycerine into value-added chemical products.

While three major commodity chemicals can be derived from glycerine – acrylic acid, lactic acid, and propylene glycol, which serve as building blocks for environmentally friendly plastics and polymers, there have been “bottleneck problems” hindering the industrial production of these chemicals from glycerine. Dr. Ye’s research focuses on innovative technology development to overcome these problems, while his modeling showed economic promise for the commercial production of value-added chemicals from glycerine.

Biodiesel Board Praises Denial of RFS Challenge

nbb-logoThe National Biodiesel Board (NBB) joined the chorus of biofuel groups happy with the decision handed down by the District of Columbia Circuit Court rejecting a petition filed by Monroe Energy, LLC that challenged the Environmental Protection Agency’s (EPA) 2013 Renewable Fuel Standards (RFS).

“The court’s decision today is only the latest in a long series of cases in which the courts have found that the RFS is a fair and reasonable program for achieving our national energy objectives, including promoting more Advanced Biofuel such as biodiesel. The bottom line is that there was more than enough EPA-designated Advanced Biofuel available last year to meet the standards.

The RFS is working, and we strongly encourage the petroleum industry to get on board. There is plenty of room for fossil fuels and renewable fuels in the United States, and consumers will be better off with a choice.” – Anne Steckel, vice president of federal affairs for the National Biodiesel Board.

The court rejected Monroe’s arguments that the 2013 standards were invalid because the EPA was late in finalizing the volumes, and that the EPA should have reduced overall and Advanced Biofuel volume requirements when it reduced cellulosic ethanol volumes last year.

Biodiesel Board Fights Back On Corn Waste Article

jobe1The National Biodiesel Board is jumping on an article that seems to be more in the ballpark of its cellulosic ethanol cousins. In a letter to the editor of the St. Louis Post-Dispatch, NBB Chief Executive Officer Joe Jobe takes issue with what he calls are “some dubious conclusions” of the Associated Press’ “Fuels from corn waste not better than gas” article that slams cellulosic ethanol made from corn stover. But Jobe says a bigger point is missed in the article: how biodiesel is America’s first nationally distributed advanced biofuel and is working right now.

Last year, the domestic biodiesel industry produced 1.7 billion gallons of renewable fuel, filling the vast majority of the EPA’s advanced biofuel volume requirements under the federal Renewable Fuel Standard.

The RFS was created by a bipartisan coalition in Congress. They recognized moving away from a singular reliance on petroleum for transportation fuel needs is paramount to America’s national security, economic and environmental interests. It has helped biodiesel — made in communities across the country from recycled cooking oil, animal fats and abundant vegetable oils — become an American success story.

Jobe goes on to point out that this country is importing less oil than at any time since 1991, and biodiesel is a big reason why that is happening. He also makes the case how biodiesel is “diversifying our transportation fuel portfolio and creating options,” while reducing carbon pollution by as much as 86 percent compared to petroleum diesel.

Biodiesel Board Joins EPA, DOJ Against Big Oil

scalesofjustice1While the basketball national championship might have been decided on the court, it could be the courts that decide the future of advanced biofuels in this country. The National Biodiesel Board (NBB) joined forces with the Environmental Protection Agency (EPA) and Department of Justice to fight an attempt to dismantle the Renewable Fuel Standard (NBB).

In the current case, Monroe Energy, joined by the American Petroleum Institute and other groups, is challenging the EPA’s handling of the 2013 volume requirements. Among the arguments supporting the EPA’s position, NBB points out that that the petroleum industry’s challenge makes no argument that insufficient volumes of renewable fuels were available in 2013 and fundamentally misinterprets the EPA’s authority to waive volume requirements under the law. NBB maintains that the EPA’s 2013 standards achieved the directives of Congress.

“The renewable fuels industry is united in supporting the RFS to promote production of clean, alternative fuels,” said Anne Steckel, NBB’s vice president of federal affairs. “As the leading producer of Advanced Biofuels in the nation, the biodiesel industry has demonstrated that the Advanced Biofuel standard is working. The simple fact is that we have met or exceeded the Advanced standard in each year of the program, including in 2013 when the RFS delivered more than 3.3 billion RIN-equivalent gallons of Advanced fuels, made up mostly of biodiesel and renewable diesel.”

“Big Oil likes to say the RFS isn’t working, but what’s really broken is the decades-long stranglehold the petroleum industry has on our fuel supplies,” Steckel added.

The U.S. Court of Appeals for the District of Columbia is hearing the case, and NBB says the decision will have tremendous implications for the future of advanced biofuels and affirm the EPA’s obligation to maintain the statutory volumes.

Biodiesel Tax Incentive Moves Out of Committee

cap pic1A measure that would renew the federal $1-per-gallon biodiesel tax incentive has cleared a congressional committee. The credit, which expired at the end of 2013, passed the Senate Finance Committee as part of a package of tax provisions. The news was welcomed by the National Biodiesel Board, which still appeared miffed it expired in the first place, as Congress let happen in 2010 and 2012.

“This is the third time in five years that the biodiesel incentive has lapsed, making it incredibly difficult for biodiesel businesses to plan for expansion or build infrastructure,” said Anne Steckel, vice president of federal affairs at the National Biodiesel Board, the industry trade association. “We applaud the Senate Finance Committee for taking the first step toward extending it and urge the House and Senate to continue the committee’s bipartisan work by acting quickly to extend this credit so the biodiesel industry can get back to work.”

“The U.S. biodiesel industry has plants in almost every state in the country, and this tax incentive is something Congress can pass today to stimulate growth and economic activity at all of them,” Steckel added. “This incentive is a job creator, and it also pays tremendous dividends in terms of reducing harmful emissions and strengthening our energy security.”

The measure calls for the incentive to be restored retroactively back to Jan. 1, 2014, and extended through the end of 2015.

Biofuel Organizations Call for Tax Credits Extensions

US Capitol at dusk photo Joanna SchroederLeaders from several biofuel trade organizations are calling for the extension of some federal advanced biofuel tax credits. The Advanced Ethanol Council, Advanced Biofuels Association, Algae Biomass Organization, Biotechnology Industry Organization, Growth Energy, National Biodiesel Board, and Renewable Fuels Association have sent a letter to the Senate calling for the restoration of the Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property, the Biodiesel and Renewable Diesel Fuels Credit, and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit.

The letter reads, in part, “The advanced biofuels industry is at a critical stage of development. Despite a difficult financial market, we are now operating commercial plants across the country and continue to make progress on dozens of additional projects in the final stages of development. Advanced biofuel tax credits have allowed the biofuels industry to make great strides in reducing the cost of production and developing first-of-kind technologies to deploy the most innovative fuel in the world.

“As leaders in a critical innovation sector in the United States, we are well aware of the financial constraints facing this country. However, the United States’ global competitors are offering tax incentives for advanced biofuels and in fact are attracting construction of new facilities – and associated high skilled jobs. If Congress wants American companies to continue developing these homegrown technologies in the United States, it must extend these credits. Biofuel producers are also competing with incumbent fossil energy industries who continue to enjoy tax incentives on a permanent basis.”

The letter marks the latest effort by biodiesel and ethanol producers and their backers to get better federal government support for their green fuels. Late last year, the Environmental Protection Agency undercut the industries when it proposed drastic reductions in the amount of biodiesel and ethanol to be mixed into the Nation’s fuel supply. In addition, Washington also let these vital federal tax credits expire at the end of the year.

Celebrating Biodiesel Day Advocating for Green Fuel

biodieselday1While yesterday was National Biodiesel Day, our friends at the National Biodiesel Board were not just cutting birthday cake. They were advocating on Capitol Hill for the green fuel. March 18th marks the 156th birthday of Rudolf Diesel, the inventor of the engine that bears his name and a man who wanted it to run on peanut oil, not petroleum. The NBB’s governing board spent the day talking to lawmakers and taking part in meetings in Washington, D.C.

While hearing more about the NBB’s communications efforts, NBB Governing Board Member Tim Keaveney, HERO BX (shown to the right), reviews a selection of the several dozen letters to the editor published to date regarding the Environmental Protection Agency’s proposal to cut drastically the amount of biodiesel required to be blended into the Nation’s fuel supply.

biodieselday2Meanwhile, in this picture on the left, NBB Governing Board members listen to representatives of Bingham McCutchen as they provide an update on litigation related to the RFS.

In a separate news release, while pointing out that the EPA is proposing 1.28 billion gallons of biodiesel to be blended – a sharp drop from last year’s record production in the biomass-based diesel of 1.8 billion gallons – NBB officials made another push for biodiesel.

“Nearly every product that ends up on a store shelf is dependent on diesel fuel to get it there. That heavy reliance on one fuel means our economy is directly linked to petroleum price swings. It’s in everyone’s best interest to have a choice in transportation fuel, and that’s where biodiesel – America’s first Advanced Biofuel – comes in,” said Joe Jobe, National Biodiesel Board CEO.

Celebrating National Biodiesel Day

rudolf-diesel_3946456981091095575Yesterday we celebrated the patron saint of Ireland – today it is the patron saint of biodiesel.

National Biodiesel Day is celebrated on March 18, which is the birth date of Rudolf Diesel, inventor of the engine that bears his name. He would be 156 years old today, but he died a century ago last September, disappearing from a ship in the English Channel in an apparent suicide, despite his many accomplishments.

Diesel was only 39 when he introduced the first high-compression prototype engine in 1897, designed to run not on petroleum but on peanut oil. Today, diesel engines are responsible for moving the majority of goods, including electronics, from manufacturer to consumer. But, more than ever those engines are being run on the type of fuel their inventor envisioned.

“National Biodiesel Day is a reminder that diversity in fuel supply means more stable prices and less dependence on a global oil cartel. That benefits the economy, the environment and leaves more opportunities for our future,” said Joe Jobe, CEO of the National Biodiesel Board. “It’s in everyone’s best interest to have a choice in transportation fuel, and that’s where biodiesel – America’s first Advanced Biofuel – comes in.” With plants in almost every state, biodiesel production amounted to nearly 1.8 billion gallons in 2013.

Jobe notes that the EPA proposal to lower the Renewable Fuel Standard (RFS) this year would be a step backward for production, setting the volume requirement at just 1.28 billion gallons. “The biodiesel industry is asking the Administration to revise the biodiesel proposal so that it is at least consistent with last year’s production,” he said. Rudolf would probably agree.

Biodiesel Board Pleased with CARB Findings

nbb-advancedThe National Biodiesel Board (NBB) is pleased with the preliminary Indirect Land Use Change (iLUC) values presented by the California Air Resources Board (CARB) at a workshop on Tuesday.

“We applaud the Air Resources Board for recognizing the need to reduce carbon from transportation and fossil fuels to mitigate climate change,” said Don Scott, National Biodiesel Board Director of Sustainability, who was present at the workshop. “Since America’s Advanced Biofuel, biodiesel, is among the most effective tools for carbon reduction this represents a major step forward. We are hopeful the agency will continue on this path to use the best science to quantify the benefits of biodiesel.”

According to NBB, the proposal “recognizes biodiesel’s sustainability and environmental benefits, takes a notable step in the right direction, and will open new avenues for biodiesel use in the state.”

During the workshop, Scott made several comments and observations about the preliminary findings presented by CARB. “I think CARB is on the right track with improving these models to quantify those economic impacts that ripple through the world and impact food production,” he said at one point in the meeting. “The biodiesel industry was not thrilled initially about the idea of indirect land use change because our goals have always been to do what we can domestically without impacting food, either in prices or availability.” But, he says the iLUC models actually show that is true when it comes to biodiesel. Don Scott, NBB comments during CARB Workshop

Genscape Brings Integrity to Biodiesel RINs

Genscape LogoConfidence in the identification numbers for the government’s Renewable Fuel Standard (RFS) is key to the growth in biodiesel. This article from Biodiesel Magazine says the National Biodiesel Board-backed Genscape RIN (Renewable Identification Number) Integrity Network is helping keep up the confidence that those record-breaking biodiesel production numbers are legit.

Genscape provides U.S. EPA preregistered [quality assurance plans] QAP services and a number of other RIN integrity, RFS and low carbon fuel standard services to more than 40 renewable fuel producers, obligated parties, and midmarketers across three continents.

QAP has translated into increased RIN value for Genscape producers. QAP provides additional value not just for producers with smaller balance sheets or for producers who are new to the industry, but also for larger, well-established producers. In one example, a longstanding biodiesel producer looked to Genscape to provide RIN integrity guidance and proof of RIN assurance to two new buyers. This is an indicator that buyers are starting to rely more on third-party RIN integrity, like QAP, even for larger, more well-established producers.

Using Genscape QAP, producers are making sure they’re getting the best prices for RINs, able to secure longer-term deals, grow their buyer base, and meet the increasing demand for QAP RINs in counterparty agreements.

Biodiesel Finds Allies at Commodity Classic

jobe1Commodity Classic is the annual meeting that attracts more than 7,000 corn, soybean, wheat and sorghum farmers, but it’s also a great place to find biodiesel and ethanol producers. Joe Jobe, CEO of the National Biodiesel Board (NBB) says they make sure to connect with their allies from the commodity groups, especially those soybean growers.

“Biodiesel is made from a variety of feedstocks, but soy has always been the predominant feedstock for biodiesel and will be going forward,” he says, although corn oil from ethanol plants and animal fats have been making their mark in the green fuel as well. “The soybean leadership has really created the roots for biodiesel, and we still come to connect with our soybean farmer friends and leaders and talk about the status of biodiesel.”

And there was plenty to talk about at Commodity Classic when it comes to biodiesel. The double-whammy of the Environmental Protection Agency (EPA) proposing to cut in half the amount of biodiesel to be blended into the Nation’s fuel supply and the expiration of the $1-a-gallon federal biodiesel tax credit has made for plenty of conversations. Joe is really perplexed at the cut to the share of biodiesel in the Renewable Fuels Standard (RFS) considering how biodiesel is able to make up a lot possible shortfalls from cellulosic and blend wall issues facing ethanol.

“Biodiesel filled virtually the whole advanced biofuel pool, not just the biomass-based diesel pool. And because biodiesel has been so successful, the advanced biofuel goals have been met or exceeded every single year of the [RFS, despite] other advanced biofuels not coming online as quickly as hoped,” Jobe says.

The soybean growers Jobe and his folks have been able to connect with at Commodity Classic have been big allies in the push to get the RFS levels restored, but he’s also seeing help coming from corn growers who obviously have a bigger stake in what happens to ethanol but are pushing to keep the RFS as it was intended because of how it lifts all biofuels. He’s optimistic all of their efforts will be successful. “We have to believe the EPA is going to do the right thing, because the right thing is so easy and so obvious,” said Jobe.

Listen to my interview with Joe here: Joe Jobe, CEO of NBB at Commodity Classic

2014 Commodity Classic Photos

Student Talks Biodiesel By-Product at Conference

pickett1The cutting edge of innovation was certainly on display at the recent National Biodiesel Conference & Expo in San Diego. Among the many innovations was a University of Kansas graduate student, who, with a little financial assistance from the folks at the Kansas Soybean Commission (KSC), talked about a new use for the biodiesel by-product, glycerin.

Derek Pickett … was part of the Next Generation Scientists for Biodiesel (NGSB) program that aimed to educate and collaborate with young scientists.

Pickett presented his findings about using glycerin for power generation during a conference session specifically designed for student-scientists to share their cutting-edge research. Glycerin is a byproduct of biodiesel production, with each gallon of biodiesel producing about 1 pound of glycerin. His research found glycerin that is converted to a synthetic gas has the potential to be an inexpensive source of power.

“Kansas soybean farmers are excited to see young scientists so enthusiastic about research related to biodiesel, which can be made from our crop,” said Dennis Gruenbacher, Andale, who represents the commission’s south-central district. “Those students already are working hard to find even more opportunities for biodiesel to benefit America’s environment and energy security.”

This year, the National Biodiesel Board’s NGSB program brought 36 students from 18 universities to the conference, with 18 of them received scholarships from state soybean organizations and USB. Last month’s gathering also marked the new session that focused solely on university biodiesel research.

Canadian Biodiesel Maker Gets BQ-9000 Designation

glb-logoCanada’s largest biodiesel producer has gained an important quality status. This news release from Great Lakes Biodiesel Inc. says the company received BQ-9000 Producer status, the highest level of industry recognized quality assurance, from the National Biodiesel Accreditation Commission (NBAC).

“Achieving BQ-9000 Producer status is just one of many goals we achieved in an effort to continuously provide our customers with the highest quality product and services” said Thomas J. Guzek, Chief Marketing Officer of Great Lakes Biodiesel. “ Our Great Lakes Team is a highly experienced and dedicated group that worked very diligently to achieve this outstanding accreditation. “We are proud to be a part of the BQ-9000 process. Most importantly, we know BQ-9000 accreditation means consistent, efficient production and supply of high quality fuel to help address the growing renewable energy demands both in Canada and US”

BQ-9000 is a cooperative and voluntary quality-assurance program administered by the National Biodiesel Board (NBB) for the accreditation of producers and marketers of biodiesel fuel. This unique program addresses requirements of the ASTM standard for biodiesel, ASTM D6751, within a structured quality system that controls storage, sampling, testing, blending, shipping, distribution, and fuel management practices. Certification is awarded following a successful formal review and audit of the applicants Quality System documentation, followed by a formal audit of the applicants conformance to its System.

Great Lakes Biodiesel Inc.’s Welland, Ontario facility is the largest biodiesel plant in Canada producing 45 million gallons per year of ASTM 6751 quality biodiesel.

Senators Introduce Bill to Reinstate Biodiesel Tax Incentive

Sens Cantwell and GrassleySenators Maria Cantwell (D-WA) and Charles Grassley (R-IA) have introduced a bill to extend the expired biodiesel tax incentive for three years. The bill, S. 2021, would extend the tax incentive until 2017.

In response to the bill’s introduction, the National Biodiesel Board (NBB) called on Congress to move swiftly on the tax legislation.

“On behalf of biodiesel producers across the country, we want to thank Sens. Cantwell and Grassley for their leadership on this issue,” said NBB Vice President of Federal Affairs Anne Steckel. “The biodiesel tax incentive has expired three times over the past five years, and each time it has severely disrupted production. By comparison, we know that at least $4 billion in incentives encouraging domestic petroleum production are built into the tax code. We need that same kind of stability for younger, cleaner industries like biodiesel and renewable diesel to compete.”

“This incentive clearly stimulates production and creates jobs at biodiesel plants across the country, and we urge the leadership of both parties to quickly take up this bill to ensure that we can continue the momentum that the biodiesel industry built last year with record production of almost 1.8 billion gallons,” Steckel added.

The $1-per-gallon incentive covers biodiesel, renewable diesel – a similar diesel alternative made with a different technology – and renewable aviation fuel. First implemented in 2005, it expired on Dec. 31, 2013. It also was allowed to lapse in 2012 and 2010. The bill would extend the tax incentive until 2017, providing the tax certainty the industry needs to gain access to capital and plan for production expansions and additional hiring.