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U.S. Biodiesel Makers Balk as Obama Clears Argentine Imports

11:25AM Feb 02, 2015

Biodiesel makers are complaining that the U.S. Environmental Protection Agency is allowing imports from Argentina while failing to comply with a law meant to encourage domestic production.

The EPA on Tuesday cleared more imports of Argentine biodiesel made from soybeans. U.S. biodiesel makers fear competition from low-cost Argentine producers and complain that the EPA cleared that application while failing to set the required minimum production targets for 2014. It also missed a legal deadline for the 2015 quota.

“Our plants are laying off people here, and EPA makes a decision helping producers in Argentina. Go figure,” Anne Steckel, director of federal affairs at the National Biodiesel Board, said Friday on a conference call.

The EPA’s troubled management of the so-called Renewable Fuel Standard has angered lawmakers of both political parties as well as producers of alternatives to gasoline. The EPA has a legal deadline of setting quotas for ethanol and other biofuels each December. It was so late in setting the 2014 quotas, that it gave up and said it would do so retroactively, leaving refiners and producers to guess at what it would demand. The agency hasn’t set a deadline the delayed 2015 quotas.

‘Legal Options’

An EPA official said that its import approval is done by a separate set of officials from those setting annual quotas.

“It’s two parallel pieces,” said Byron Bunker, director of the compliance division of the EPA Office of Transportation and Air Quality. Bunker said the plan submitted by the Argentine producers provides for an outside survey to ensure that the lands used to grow the soybeans weren’t recently cleared from forest. That’s a standard established in the law.

“We like this approach because it has third-party verification,” he said.

The biodiesel board sent a letter to EPA Administrator Gina McCarthy Friday, asking her to reconsider the decision, chief executive Joe Jobe said. If it doesn’t, the group “has a number of legal options that we’ll consider,” he said.

Without quotas, producers say they are having a hard time finding a market for their products. Corn-based ethanol makes up the largest share of the biofuel market. Biodiesel, which is often made from soybeans but also from waste cooking oil, is also a significant market, expanding to about 1.8 billion gallons in both 2013 and 2014.

The 2005 law was designed to encourage the use of renewable fuel and lessen U.S. dependence on imported oil. Refiners such as Exxon Mobil Corp. and Valero Energy Corp. are required to add a certain amount of renewable fuels to gasoline and other products each year to meet guidelines in the law and interpreted by the EPA.

The law sets up a way for foreign producers to certify that production doesn’t lead to clearing of forested land. Individual Argentine biodiesel makers had already been cleared for import before Tuesday’s decision.