Feed, fats vs. fuel
July 12, 2016
by Erica Shaffer
WASHINGTON – The US Environmental Protection Agency’s plans to increase renewable fuel volumes across all types of biofuels has some industry groups pushing back.
The National Chicken Council supports efforts for further reductions of 2017 ethanol levels, while the American Cleaning Institute (ACI), which represents the $30 billion cleaning products industry, is urging EPA to exempt or minimize the use of animal fats in the renewable fuel standards (RFS) program.
In comments submitted to EPA in response to the agency’s proposed RFS requirements, NCC President Mike Brown said the diversion of corn from feed to fuel continues to weigh heavily on US chicken producers and American consumers in the form of higher prices for food and fuel.
“NCC believes the Environmental Protection Agency (EPA) is properly proposing to use its authority under the Clean Air Act to reduce ethanol blending requirements below the statutory levels,” Brown said in his comments. “However, NCC believes the volumes proposed for 2017 are overly aggressive and based on faulty assumptions about the fuel market and thus should be further reduced to limit the disruptions to the corn market and nation’s feed supply.”
EPA proposed lower statutory targets for cellulosic and advanced biofuels in addition to total renewable fuel. But blending targets for 2017 would grow renewable fuel volume by nearly 700 million gallons between 2016 and 2017. Other targets include:
- Advanced renewable fuel — which requires 50 percent lifecycle carbon emissions reductions — would grow by nearly 400 million gallons between 2016 and 2017.
- The non-advanced or “conventional” fuels portion of total renewable fuels — which requires a minimum of 20 percent lifecycle carbon emissions reductions — would increase to 14.8 billion gallons from 14.5 billion gallons and achieve 99 percent of the Congressional target of 15 billion gallons.
- Biomass-based biodiesel — which must achieve at least 50 percent lifecycle emissions reductions — would grow by 100 million gallons between 2017 and 2018.
- Cellulosic biofuel — which requires 60 percent lifecycle carbon emissions reductions — would grow by 82 million gallons, or 35 percent, between 2016 and 2017.
NCC argues that the impact of diverting corn to ethanol production and away from animal feed has cost chicken producers $53 billion in higher actual feed costs. But it’s not just the poultry industry that is feeling the pressure of higher input costs.
Animal fats are a key ingredient used by producers of cleaning products such as fabric softeners, soap, dish detergents, personal care products and other daily consumer and industrial products. But the price of animal fats has increased 95 percent since 2006 under the RFS and tax incentives for biofuel production, according to the ACI. Additionally, the price of animal fats has exceeded that of Malaysian palm oil since 2011. ACI warned that switching to foreign-sourced palm oil threatens 25,000 US jobs.
“The RFS and biodiesel production tax credit is pricing the domestic oleochemical industry out of the market and forcing it to find cheaper and more plentiful foreign-sourced palm oil, which, over time, will drive this industry overseas,” ACI said in its comments to the agency.
“… EPA should limit the percentage of the animal fat supply that can be used in the production of biofuels or eliminate animal fats as a feedstock option. It is unfair to place such a heavy burden on a source that is as inelastic as animal fats. By doing so, EPA is deciding which industry wins and which one loses.”