Biodiesel Antidumping Investigation Postponed

By Joe Gershen, Encore BioRenewables

On June 5, 2017, the United States (US) Department of Commerce’s (DOC’s) International Trade Administration announced in the Federal Register that the preliminary determination in the antidumping and countervailing duty investigations on biodiesel from Argentina and Indonesia will be postponed. On May 22, 2017, an extension was received by DOC from the petitioner, the National Biodiesel Board (NBB) Fair Trade Coalition, allowing the department to analyze information it collected during June, July, and part of August. The preliminary determination will be made by August 21, 2017, and the final determination will be due within 75 days of the issuance of the preliminary determination.

The extension is “standard procedure,” according to NBB vice president of federal affairs Anne Steckel.

“It is typical to extend the timing of the commerce department’s preliminary determination in these cases,” she said. “This is consistent with the statute and with the agency’s regulations, in order to give the department more time to process all of the information being received. The case is proceeding as expected.”

Recent data supporting NBB claims show that dumped and subsidized biodiesel imports from Argentina continue unabated and, in fact, have further surged into the United States. On June 2, a business intelligence company reported that biodiesel exports from Argentina in April reached a five-month high, all of which was shipped to the United States. Shipment tracking information shows that significant volumes were expected in June. These reports indicate much higher volumes than were seen in January through March, which ranged from 6 million to 23 million gallons, according to the Energy Information Administration.

In March 2017, the NBB Fair Trade Coalition filed petitions with DOC and the US International Trade Commission alleging that increased volumes of subsidized and dumped biodiesel imports from Argentina and Indonesia have taken market share away from US manufacturers and have injured producers. Subsequent to the filing of this petition, Argentina substantially reduced its export taxes on biodiesel and then lifted those taxes, contributing to the increase in shipments and exacerbating already challenging circumstances for US producers.

“We’ve received information of potentially 75 million gallons of biodiesel flooding our ports soon – a significant increase from the import levels we saw in January, February, and March,” Steckel stated. “We filed the petition to level the playing field for US producers and the NBB Fair Trade Coalition will use every legal tool available to address these unfairly traded imports.”

One of those tools, a request for a finding of critical circumstances, was filed with DOC by the NBB Fair Trade Coalition on July 10 against imported Argentine biodiesel. If the government agrees with NBB’s allegations, it would allow duties to be imposed retroactively on imports reaching US shores from Argentina up to 90 days prior to DOC’s preliminary determinations on the claims in the petitions. The department’s preliminary determinations regarding the estimated rates of subsidization and dumping is expected on or about August 22, 2017, and October 20, 2017, respectively.

EPA Proposes Reducing Biofuels Requirements in 2018

The US Environmental Protection Agency (EPA) released its proposed 2018 renewable volume obligations (RVOs) under the Renewable Fuel Standard (RFS) program on July 5, 2017. This first RFS proposed rule from President Donald Trump’s administration reduces the volume of biofuels required to be blended into gasoline and diesel fuel next year and indicates a move toward a potential broader overhaul of its biofuels program.

The proposal covers RVOs for conventional, cellulosic, and advanced biofuels as well as for biomass-based diesel, which EPA proposes to keep at 2.1 billion gallons for 2019, the same as was set last year for 2018. The overall proposal seeks to maintain conventional biofuels at the same level, which is about 20 percent below targets originally laid out in 2007 under the RFS that requires increased volumes of renewable fuels each year.

The National Biodiesel Board (NBB) has been calling for EPA to set the 2018 advanced biofuel requirements at a minimum of 5.25 billion ethanol-equivalent gallons, which is close to a billion gallons more than in 2017. NBB has advocated for EPA to set biomass-based diesel requirements at 2.75 billion gallons for 2019, an increase from 2.1 billion gallons for 2018. The National Renderers Association also supports RVOs for advanced biofuels and biomass-based diesel. The group plans to submit regulatory comments to EPA and testify at the agency’s hearing scheduled in August.

This increase does not seem too ambitious given that the US biodiesel market consumed roughly 3 billion gallons last year, producing about 2 billion of those gallons domestically and importing another 1 billion gallons. The market had been expected to increase this year and next; however, no increase in RVOs provides no incentive for growth. In addition, EPA’s proposal for advanced biofuels, a category that biodiesel can also fulfill, is being decreased slightly rather than increased, from 4.28 billion ethanol-equivalent gallons this year to 4.24 billion gallons in 2018.

“This is only a proposal and, in the past, EPA’s final numbers have been higher than those in the proposal,” said Anne Steckel, NBB’s vice president of federal affairs. “We will continue to work with EPA and ensure the administration doesn’t turn its back on our domestic energy producers.

“This is a missed opportunity for biodiesel, which reduces costs, provides economic benefits, and results in lower prices at the pump,” Steckel added. “Higher advanced biofuel and biomass-based diesel volumes will support additional jobs and investment in both rural economies and clean-energy-conscious communities. The EPA should be committed to diversifying the diesel fuel market and prioritizing advanced biofuels. Targets like this ignore reality and the law, inhibiting growth in the industry.”

EPA’s proposed cuts to advanced and cellulosic biofuels “will have a chilling effect on the push toward next generation biofuels,” said Iowa Senator Chuck Grassley. 

The RFS has become a battlefield between corn and petroleum interests. The law has been a boon to agriculture, supporting economies across the Midwest. Environmentalists, who have been critical of corn ethanol, have called for Congress to reform the program. 

NOx Additive Approved for Biodiesel

The California Air Resource Board (CARB) has certified an additive that will make 20 percent blends of biodiesel in California the cleanest proven and tested diesel fuel with the lowest emissions profile. The National Biodiesel Board led the initial research and development into the additive in order to maintain biodiesel’s competitive advantage under the state’s low carbon fuel standard (LCFS). The additive ensures the reduction of every measurable regulated emission, including nitrogen oxide (NOx), when blended with California’s unique diesel formulation called CARB diesel.

Branded VESTA1000, the CARB-certified additive ensures compliance with the January 1, 2018, implementation of CARB’s Alternative Diesel Fuel regulation. A 20 percent blend of biodiesel with VESTA 1000 reduced NOx by 1.9 percent and particulate matter by 18 percent compared to CARB diesel fuel. California Fueling LLC will produce the formula and Pacific Fuel Resource LLC will deliver the product to market.

Aemetis Enters Into Biodiesel Supply Agreement with BP

Aemetis Inc. has announced its Universal Biofuels subsidiary in India has signed a three-year biofuels supply agreement with BP Singapore Pte. Limited (BPS), the regional trading arm of BP Plc, which has an expanding biofuels portfolio. Production is expected to commence this summer with shipments to foreign markets to begin in the third quarter of this year.

The Aemetis plant in Kakinada, Andhra Pradesh, has a capacity of 50 million gallons per year and is the first and only Indian biofuels producer approved under California’s Low Carbon Fuel Standard for delivery of tallow- and waste oil-based biodiesel into the state. In April 2017, Aemetis filed a patent on process technology developed at the Kakinada, India, plant for the conversion of a wide range of waste feedstocks into biodiesel.

Delek Acquires Renewable Diesel and Jet Fuel Producer

Delek US Holdings Inc., a downstream energy company with assets in petroleum refining, renewables, logistics, convenience store retailing, and asphalt, has taken full ownership of Alon USA Energy Inc., an independent petroleum refiner, marketer, and retailer, and owner of renewable diesel and jet fuel producer AltAir Fuels in California. Prior to this transaction, Delek owned approximately 47 percent of the common stock of Alon. In addition to its other assets, Delek’s renewables division includes approximately 61 million gallons per year of biodiesel and renewable hydrocarbon diesel production from biodiesel plants in Cleburne, Texas; Crossett, Arkansas; and now the AltAir renewable hydrocarbon diesel and bio-jet fuel facility in Paramount, California.

REG President Resigns, Plant Suffers Fire

Daniel J. Oh resigned as president and chief executive officer (CEO) of Renewable Energy Group (REG) on July 3, 2017. No reason was given for his departure. REG’s board appointed long-time director Randolph (Randy) L. Howard as interim president and CEO until a replacement is found. Howard was previously a senior executive with Unocal Corporation for 33 years, including as president of its North Asian energy business, vice president of refining, and vice president of supply, trading, and transportation. 

In early June, a major fire broke out at REG’s biodiesel plant in DeForest, Wisconsin. No injuries were reported at the facility, which was acquired from Sanimax last year, and damages were estimated to be $1 million by the DeForest Windsor Fire Department. However, REG is reported in local news media as indicating it is too early to determine the damage to the plant.

Shell Signs Agreement with SBI BioEnergy

Royal Dutch Shell Plc, through its subsidiary Shell International Exploration and Production B.V., and SBI BioEnergy Inc. have reached an agreement granting Shell exclusive development and licensing rights for SBI’s biofuel technology. Edmonton, Canada-based SBI has a patented process that can convert a wide range of waste oils, greases, and sustainable vegetable oils into lower carbon drop-ins for diesel, jet fuel, and gasoline. Under the agreement, Shell and SBI will work together to demonstrate the potential of the technology and, if successful, scale up for commercial application.

SBI uses a continuous catalytic process to make drop-in biofuels that do not require blending or any modifications to engines or infrastructure.

August 2017 RENDER | back