Mixed reaction among US feed producers, users to new biofuel final rule

By Aerin Curtis

- Last updated on GMT

Mixed reaction among US feed producers, users to new biofuel final rule

Related tags: Ethanol fuel, Maize, Biofuel

The US Environmental Protection Agency’s (EPA) final rule on Renewable Fuel Standard (RFS) volume obligations has generated mixed responses from several feed and crop organizations.

The final rule​, released earlier this week, includes updated volume targets for 2014, 2015 and 2016 — at higher levels than proposed by the agency in May 2015.

The National Chicken Council (NCC) said that the volume hikes are a blow to chicken producers.

“By increasing the mandated volume of ethanol beyond the blend wall for next year, and retroactively increasing the mandates for 2014 and 2015, more corn from feed and food will be diverted into fuel production, resulting in increased costs for poultry and livestock producers,” ​said Mike Brown, council president. “Since the RFS was enacted, chicken producers alone have incurred more than $50 billion in higher actual feed costs due to the ethanol mandates, and the tab keeps getting run up under this broken law.”

The organization previously told us that amount of corn used in ethanol has increased the price of feed corn for poultry producers. 

“The US chicken industry is again only one supply shock, flood or drought, away from high volatile corn prices as in 2009 and 2012,”​ said spokesman Tom Super in an earlier interview. “Where chicken producers have to adjust production and limit flocks due to corn prices, the RFS protects ethanol producers from having to make the same type of adjustments.”

The organization would like to see less protection of the ethanol industry as an end user of corn, he added.

Support for mandate in some quarters

But the American Soybean Association (ASA) backed the new regulations.

The levels set for biomass-based diesel show an increase from targets mentioned in a draft version of the rule, reported the ASA. Soybean oil is a primary ingredient used to create much of the fuel.  

The increase in amounts should help keep the price of soymeal for feed low, said the ASA.

The RFS volumes help drive demand for soybean oil, said Tom Hance, ASA’s Washington representative. The economics involved, combined with the current low price of petroleum mean not much biodiesel would be used otherwise.

“This final rule sets the biodiesel [volumes] for 2016 and 2017, so producers will know what the market looks like, what soybean oil and demand will look like because of that,”​ he told FeedNavigator. 

Volumes too low says NCGA

However, the National Corn Growers Association (NCGA) and the National Sorghum Producers (NSP) are not completely in favor of the new targets.

Both groups maintain that the new volume requirements are too low, and should be raised to match levels set when the US Congress passed the RFS in The Clean Air Act.

“While we are pleased to see the EPA take a step forward and revise its original proposal, the fact remains that any reduction in the statutory amount will have a negative impact on our economy, our energy security, and the environment,”​ said Chip Bowling, NCGA president.

The country ought to be seeking a stronger commitment to renewable fuels, he said. The organization is “evaluating our options”​ regarding future steps.

“We will fight to protect the rights of farmers and consumers and hold the EPA accountable,” ​he added.

Members of the NSP said that while they were “disappointed”​ by the final amounts set, they were pleased to see an increase in blending requirements and the breaking of the blend wall.

Final rule details

The goal of the RFS is to promote the use of renewable fuel through at least 2022, reduce the emission of greenhouse gases and boost energy security, reported the EPA. It also aims to increase the kinds of biofuel produced.

In the new rule, the volumes have been increased across the categories so that the 2016 expectations include:

  • Cellulosic biofuel – 230m gallons
  • Biomass-based diesel – 1.9bn gallons increasing to 2bn gallons in 2017
  • Advanced biofuel – 3.61bn gallons
  • Renewable fuel – 18.11bn gallons.

Related topics: Regulation

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