Senators request immediate RFS2 implementation for biodiesel industry

By Susanne Retka Schill | July 15, 2009
Posted August 10, 2009

A group of 24 senators led by Sen. Kent Conrad (D-ND) and Sen. Chuck Grassely (R-IA) sent a letter to President Barack Obama asking for immediate action on the biomass-based diesel provisions of the renewable fuels standard (RFS2) either by Executive Order or through U.S. EPA action. "Given the significant delays associated with RFS2 implementation, the precarious state of the U.S. biodiesel industry and the volume goals established by statute for biomass-based diesel, we believe this matter must be addressed immediately," the Aug. 6 letter stated.

Implementation of the RFS has been delayed for months and is causing uncertainty and harm to biodiesel plants that made significant investments based on the new volume goals in the RFS. The standard calls for 500 million gallons of biomass-based diesel in 2009, 650 million gallons n 2010, 800 million gallons in 2011 and 1 billion gallons in 2012 and after. "This policy, if implemented in a timely and workable fashion, will promote the significant economic, environmental and energy security benefits associated with the domestic production and use of biodiesel," the letter said.

Noting that while the RFS was to begin on Jan. 1, 2009, the recent two month extension for comments to the proposed rule is likely to delay implementation of the standard well into 2010. "The U.S. biodiesel industry desperately needs the market provided by the RFS2 and cannot afford a significant delay in the implementation of the volume requirements mandated by the Energy Independence and Security Act," the letter said, going on to described the industry situation: "Domestic biodiesel producers face a practically non-existent domestic marketplace. Currently, 70 percent of U.S. biodiesel production capacity is idle. Domestic production is expected to be less than 50 percent of last year's levels and numerous bankruptcies loom for the industry. If this situation is not addressed immediately, the domestic biodiesel industry expects to lose 29,000 jobs in 2009 alone, and the nation's ability to meet the common-sense volume targets for biomass-based diesel provided for in RFS-2 will be compromised. A viable biodiesel industry is key to reducing U.S. dependence on foreign oil and meeting our nation's renewable energy goals.

"The NBB thanks Senator Conrad, Senator Grassley and the 22 like-minded Senators who signed this common sense letter for highlighting this issue of vital importance to the domestic biodiesel industry," said Manning Feraci, National Biodiesel Board vice president of federal affairs. "Biodiesel stakeholders have made vital business and economic decisions based on the fuel volumes required in RFS2, and we wholeheartedly share the view expressed in the letter that the Administration should use the authority it has under current law to take timely, interims steps to implement the 2009 and 2010 volume requirement for biomass-based diesel."
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