Tuesday, May 19, 2009

US - ASA refutes EPA's proposed ILUC rules

In a news release, the American Soybean Association submitted its comments to the House Agriculture Subcommittee on Conservation, Credit, Energy and Research regarding the impact of the indirect land use and renewable biomass provisions in the EPA’s RFS-2. There are numerous factors that ASA believes refute the possibility that significant international indirect land use change would result from the relatively small increase in US bio-diesel production called for under the RFS-2. These comments are available at: www.SoyGrowers.com/policy/indirect.pdf.

The EPA's conclusions that US corn and soy-based bio-fuel production is significantly less environmentally friendly than previously believed drew sharp criticism from Democratic and Republican lawmakers in a Tuesday hearing, Dow Jones Newswires reports.

The EPA's decision to include "indirect land use" when calculating how much ethanol and bio-diesel reduce green house gas emissions would effectively guarantee that soy-based fuels would not qualify for government production mandates, the US Department of Agriculture Chief Economist said. Soy-based bio-diesel "shows a very large decrease in green house gas emissions," he added, but when the EPA adds in the indirect land use calculation, "it doesn't meet the criteria." The renewable fuel standard calls for 500 million gallons of bio-diesel production in 2009 and 1 billion gallons by 2012. To be eligible for that mandate, soy-based bio-diesel would have to show a 50% reduction in green house gases from petroleum-based diesel. The EPA calculation, though, shows the reduction at only about 20%.

The House Agriculture Committee chairman said the Obama administration’s GHG proposals would “kill off the biofuels industry before it even gets started” and he will not support any climate change bills, making him the first committee chairman to voice opposition to climate change legislation, Reuters reports. He told Agriculture Department and EPA officials at a hearing on ethanol's impact on land use and greenhouse gases that it was “in bed with the oil industry”.

He and other Committee members also said the 2007 law and Renewable Fuel Standard is flawed because it wrongly excludes or limits "a majority of the country's woody biomass" and/or switchgrass from being counted as feedstock. A White House deputy advisor on climate change responded that the Obama Administration “is committed to renewable fuels” and only this week has requested data from scientists on how to calculate whether biofuels increase or reduce GHGs, as part of a draft rule aimed at making corn ethanol production more efficient and to increase production of advanced biofuels.

Two recent studies suggest 9 million acres (22 million ha) of additional land will be needed if US ethanol output expands by 13.25 billion gallons (51 billion liters), according to the USDA chief economist, which is less than half the new-crop area projected in a 2008 analysis. He also says there is “little question that increased biofuel production will have effects on land use in the US and the rest of the world” while the question was over the magnitude.

Inside EPA Weekly adds that the Agriculture Committee Chairman was joined by numerous other Democrats and Republicans on the committee in opposing aspects of EPA's RFS proposal.

HydroGenetics, has announced that on May 4th 2009 Buffalo Bio-diesel Inc, a wholly owned subsidiary of HydroGenetics, entered into a delivery contract of 1,000,000 lbs of high quality recycled bio-diesel feedstock with one of the largest bio-diesel producers in the North East. BBD completed the first contract of 750,000 lbs of high quality recycled bio-diesel feedstock in April, Market Wire reports. The contract requires BBD to deliver 1MM lbs of high quality recycled bio-diesel feedstock per month in May. It will gross BBD in excess of $220,000.

California regulators have approved new rules that ban storing certain types of bio-diesel in underground fuel tanks in order to avoid the risk of water pollution, San Jose Mercury News reports. By a 3-1 vote, the State Water Resources Control Board said that gas stations, fleet yards and others who bio-diesel distributors can only store bio-diesel blends of up to 20 percent in underground tanks, even if the tanks are double-walled. (07 May 2009)

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