The rendering industry continues to face many challenges, especially when it comes to government regulations. The best forum to develop strategies to confront these matters head-on is industry meetings, so National Renderers Association (NRA) members met at the end of April in Cincinnati, OH, to attack the tough issues.
NRA business meetings began with the Environmental Committee dishing out bad news about the multitude of regulations coming out of Washington, DC. First up was a report on the Environmental Protection Agency’s (EPA) greenhouse gas (GHG) reporting rule, which requires facilities that emit 25,000 metric tons or more per year of GHG emissions to submit annual reports to EPA. Dr. David Meeker, NRA Scientific Services, stated that the association has signed on with other industry groups in a letter to EPA expressing concern over the implementation of the rule. The coalition has requested the agency “allow the use of best available monitoring methods through and beyond December 31, 2010.” The groups believe the existing deadline of March 31, 2010, does not provide adequate lead time to ensure compliance.
Also of concern is EPA’s controversial finding in late 2009 that GHGs endanger public health, a move that could result in additional regulations of GHG emissions under the Clean Air Act. Committee Chairman Bob Vogler said the finding means that emission sources will be subject to Prevention of Significant Deterioration (PSD) and Title V operating permit requirements as a result of GHG emissions. He pointed out that a pending “tailoring rule” may increase the threshold limits for Title V permitting in an effort to carve out smaller emitters from the act (see “EPA Finalizes Thresholds for Greenhouse Gas Permitting Requirements” on page 12). Meanwhile, multiple lawsuits by industry groups and states have been filed challenging the validity of EPA’s endangerment finding, and Congress is examining options to block EPA’s actions.
“For all practical purposes, the regulation of GHGs takes effect January 1, 2011, and will apply to many permitting processes, even pending permits, under PSD and Title V,” Vogler warned. “It’s a mess. We’ll have to stay tuned to see how it all works out.”
Vogler also updated the committee on EPA’s pressure on states to impose corrective actions when stormwater discharges exceed benchmarks. He said the trend is to reduce pollution from stormwater by eliminating stormwater runoff completely.
Meeker then briefed members on NRA’s comments to EPA on other final or proposed rules, such as the agency’s new national ambient air quality standard for ozone, which will greatly increase the number of nonattainment areas with tighter restrictions on sulfur dioxide, nitrogen oxide, and particulate matter. The association also sent comments to EPA on its proposed ammonia standards for water that are based on the presence of certain freshwater mussels. The standards as proposed will likely apply to numerous waterways across the United States. Meeker thanked renderers for providing input on these comments, and stressed the importance of NRA’s alignment with certain coalitions in order to better respond to the many environmental issues facing the industry.
Another challenging area is the biofuels industry, where the lack of an extension of a tax credit that expired December 31, 2009, has caused many biodiesel plants to cease operation. However, a bright light emerged for the rendering industry with the February 2010 release of EPA’s National Renewable Fuel Standard. Biofuels Committee Chairman Chuck Neece pointed out that work done years ago by Dr. Gary Pearl and Fred Wellons on the life cycle analysis of animal fats and recycled cooking oils has emerged in the new standard, with fats, oils, and greases (FOG) being one of only three biomass-based liquids to have the data available to determine they significantly reduce GHG emissions.
While the amount of biodiesel produced currently is far below the 545 gallons produced last year and significantly less than the 690 gallons in 2008, the use of rendered fats and oils as a feedstock has increased, from five percent usage a few years ago, to 25 percent last year. Current FOG use estimates are about 75 to 80 percent, primarily because of their lower cost and the lack of the tax credit.
Neece explained that renderers’ obligations under the new renewable fuel standard, which goes into effect July 1, 2010, is to provide the biodiesel producer a statement on the contract or a letter on company letterhead that includes a license number that the fat or oil purchased is a recycled product. This is to prevent the possibility of blending canola and palm oils and calling it yellow grease.
Steve Kopperud, Policy Directions, updated members on Congress’ actions to renew any of the 1,100 tax credits that expired at the end of 2009, of which two are the biodiesel and alternative fuel mixture tax credits. Currently the House and Senate have different versions of bills to extend these expired credits, but one hurdle is the $27 million saved by removing a tax credit for the paper industry that was used by Senator Nancy Pelosi (D-CA) for health care reform. Kopperud says a concern in Congress is the lack of infrastructure to move biodiesel around the country. He informed renderers that both bills need to be identical and need to pass prior to the end of May, which is when Congress will turn its attention to other issues, including mid-year elections this November.
The Transmissible Spongiform Encephalopathy Committee meeting was brief, with NRA President Tom Cook revealing that the Food and Drug Administration held a webinar for the public in mid-April that reported the industry’s outstanding compliance with the feed rule. Renderers had no serious violations in the last report released in early April, with only a few violations among feed manufacturers (see “Feed Rule Compliance Excellent”).
The committee was asked and agreed to spearhead a new third-party rendering industry economic analysis in collaboration with the Fats and Proteins Research Foundation (FPRF) and Animal Protein Producers Industry (APPI) Committee. A similar study was done nearly 10 years ago and much has happened within the industry that could have changed the demographics. The industry believes having an updated analysis would assist its organizations in future program planning and to reevaluate priorities.
NRA’s Legislative Committee had a full agenda, with Kopperud commenting that polls show 51 percent of voters voting this fall will vote against the incumbent. He noted that although the farm bill doesn’t expire until 2012, the House Agriculture Committee is already holding hearings because funds currently available will not be there in 2012 so those who benefit will need to evaluate changes now.
Cook reminded members that the NRA Congressional Fly-in is June 14-16, and emphasized that attending every year becomes more and more important.
Michael Koewler, Sacramento Rendering Company, informed the committee on issues facing the industry in California that could have an affect on the rest of the country. One matter is the desire to compost unprocessed meat material that is being pushed by the “green” community and waste haulers in an effort to gain state biomass diversion credits. But perhaps a bigger concern among renderers is the impending retirement of California’s state veterinarian, Dr. Richard Breitmeyer, a long-time proponent of rendering.
“Dr. Breitmeyer’s retirement will be a big blow to the industry,” commented Ross Hamilton, Darling International. “A real scary thought is who is going to replace him.”
Grease theft was then addressed by the committee, where it was agreed upon that although most states have some type of law in place to protect grease collection, the problem is the lack of manpower to enforce those laws and prosecutors who have bigger issues to deal with than grease theft. Bob Griffin, Griffin Industries, recommended every theft be documented and a police report filed so law enforcement and legislators can comprehend the magnitude of the problem. After discussing various avenues to help deter thefts, committee members agreed to approach the National Restaurant Association on providing education to their members.
Meeker disclosed during the APPI Committee meeting that over 100 rendering plants are certified in the industry’s Code of Practice, representing over 90 percent of U.S. production. He informed members that rendering plants that test negative for Salmonella at load-out attribute the result to plant cleanliness, while Fred Cespedes, American Proteins, noted that research within the company showed combustible dust is not as big an issue in rendering plants as previously thought.
The NRA Board of Directors wrapped up the business meetings with Chairman Kevin Golding, Rothsay, thanking the Griffin family for their hospitality in Cincinnati (see “Kentucky Hospitality” on this page). Cook informed the board that membership is stable and encouraged renderers to support the International Market Development Committee (IMDC) either as a member or through monetary donations because exports affect everyone as it removes product from the domestic market.
With that said, Koewler presented a check for $21,000 to IMDC Chairman Mike Gilbert from the Pacific Coast Renderers Association (PCRA), while Robert Vogler, Valley Proteins, handed over a $7,500 donation from the Eastern Region Renderers Association. Both groups also donated to FPRF, with PCRA providing $22,000 and the Eastern Region pledging $7,500.
The vast scope of issues being faced in the international markets called for meetings spread over two days. Dr. Albert Tacon, newly hired IMDC Latin America aquaculture consultant, presented total global aquaculture production numbers, which was 68.3 million metric tons in 2008, with 91 percent of that production in Asia. Total compound feed (pig, poultry, ruminant) production worldwide in 2009 was 708 million metric tons, up 20 percent since 1995, while estimated global production of commercial aquaculture feeds in 2008 was 29.3 million metric tons. He explained the major dietary nutrient sources used in aquafeeds, including land animal protein meals and fats, and pointed out that while fish meal prices remain at record levels, fish oil prices are down from their highest point in early 2008.
Tacon disclosed that global production of rendered animal protein in 2008 was 12.9 million tons, with the top producers being the United States at 31.5 percent, South America at 30.6 percent, and the 18 countries that made up the European Union (EU-18) in 2008 at 29.8 percent. Total global production of rendered fats and greases that year was 10.2 million metric tons, with the Untied States producing 44.7 percent of that amount, the EU-18 at 26.2 percent, and South America at 22.2 percent.
Kent Swisher, NRA International Programs, explained the complexities of how NRA petitions for government funding through the United Export Strategy program, which is highly competitive with other agriculture groups. While funds NRA has received under the Foreign Market Development program have dropped off slightly over the past 10 years, monies awarded under the Market Access Program have increased. The funds are provided as a match to industry contribution. NRA’s budget allocates 44 percent of the monies to Asia, 39 percent to Latin America, nine percent worldwide, and eight percent to Europe, the Middle East, and Africa.
IMDC’s objective is to reestablish export markets for rendered products subject to proposed rules and regulations. Swisher then underlined some possible global constraints to that objective as being product perception, European Union regulations and influence, global standard-setting organizations such as the World Organization for Animal Health, or OIE, and global certification programs.
NRA’s global activities over the next year aim to help educate others and change perceptions. That includes further promoting and developing the World Renderers Organization (WRO), co-sponsoring global feed conferences, funding and promoting international research using rendered products, and sponsoring researchers to speak at global meetings. Swisher said being involved with the WRO is important because world organizations like OIE require input from global industries, not individual country organizations.
German Davalos, NRA regional director for Latin America, reported that Mexico is the largest market for U.S. animal protein meals, importing 115,000 metric tons in 2009. Mexican government officials planned to visit the United States in May to examine how the country is implementing its feed rule in an effort to possibly allow imports of beef from animals over 30 months of age and pet food produced with ruminant meat and bone meal. Davalos informed the IMDC that Chile is interested in using U.S. yellow grease for biodiesel so NRA is sponsoring a team visit in June to meet with suppliers of rendered fats and greases.
Dr. Peng Li, NRA regional director for Asia, showed how China’s feed industry continues to grow and discussed the complexities of reopening the market to U.S. and Canadian tallow. The China Association of Surfactant, Soap, and Detergent Industry has submitted a petition to release the bans for industrial use, but multiple government agencies must establish procedures and requirements making it a long and arduous process.
Li then highlighted the various seminars and meetings throughout Asia he and researchers attended to promote rendered products, with others planned for this year, including a special session titled, “Rendered Animal Protein Meals in Aquafeeds, Science, and Technology” at the 14th International Symposium of Fish Nutrition and Feeding in Qingdao, China, in early June. NRA also sponsored several visitors from Asia to the United States to tour rendering plants, meat processors, research facilities, and government agencies to educate them on the safety and value of animal protein and fat products.
Li said the targeted strategies in Asia for this year include the tallow ban in mainland China, the meat and bone meal ban in Vietnam, a non-ruminant meat and bone meal and porcine meal ban in Korea and Taiwan, the promotion of animal fat in biodiesel, and maintaining undisrupted ruminant meat and bone meal exports to Indonesia and the Philippines and possible expansion.
Gilbert thanked the NRA international team for their hard work at promoting rendered products overseas. He reiterated that exports help all renderers by removing product from the domestic market.
June 2010 RENDER | back