On November 9, the United States (US) Department of Commerce (DOC) issued a final determination in a case brought by the National Biodiesel Board (NBB) Fair Trade Coalition regarding subsidized biodiesel imports from Argentina and Indonesia. Earlier this year, the DOC made a preliminary finding that Argentina and Indonesia provide subsidies to their biodiesel producers in violation of international trade rules. The November decision cements that earlier finding, and the cash deposit rates required of importers of biodiesel will be updated to reflect the final determination.
The DOC is requiring importers of Argentinian and Indonesian biodiesel to pay cash deposit rates ranging from 71.45 to 72.28 percent for biodiesel from Argentina, and 34.45 to 64.73 percent for biodiesel from Indonesia, depending on the particular foreign producer/exporter involved.
The NBB Fair Trade Coalition filed the petition to address a flood of subsidized and dumped imports from Argentina and Indonesia that has resulted in market share losses and depressed prices for US producers. Biodiesel imports from Argentina and Indonesia surged by 464 percent from 2014 to 2016, taking 18.3 percentage points of market share from US manufacturers. Imports of biodiesel from Argentina jumped 144.5 percent following the filing of the petition in March. These surging, low-priced imports prevented US producers from earning adequate returns on their investments and caused them to pull back on further investments to serve a growing market, according to NBB.
To successfully secure relief, a party must file not only with the DOC but also with the International Trade Commission (ITC). The DOC determines “whether the imports are subsidized and/or dumped,” while the ITC determines “whether the domestic industry has been injured” by reason of such unfairly traded imports. The DOC also decides the margin of duties to impose on imports based on the degree of dumping and subsidies found.
The ITC held a public hearing in early November in Washington, DC, where coalition members testified before the commissioners. The ITC is scheduled to hold its final injury vote on subsidies December 5. If the final injury vote is affirmative, the DOC will publish final countervailing duty orders on the question of subsidies.
The coalition filed both antidumping and countervailing duty petitions with the DOC. Antidumping petitions address concerns whether imports coming into the United States are priced below fair value. Countervailing duty petitions address subsidies provided by foreign governments benefiting the imported product. The November 9 decision was related to subsidies. DOC is scheduled to issue final antidumping determinations in early January that will be followed by another ITC injury vote regarding dumped imports.
In a related story, the Argentine government had requested negotiations for a suspension of the antidumping and countervailing investigation, which DOC would only agree to if they ensured that injury to the US biodiesel industry is eliminated and the unfair trade practices are addressed.
“The [President Donald] Trump administration is committed to both free and fair trade and will defend American workers against unfair trade practices,” said Commerce Secretary Wilbur Ross. “Still, we are thankful to the government of Argentina for their proactive approach to solving this issue, and remain optimistic that a negotiated solution can be reached both with Argentina and with Indonesia.”
According to newly released data from the California Air Resources Board (CARB), about 50 percent of domestic US demand for renewable hydrocarbon diesel (RHD) – a biomass-based alternative diesel fuel made from hydro-treating fats and oils – comes from California, with the majority of the supply coming from Finland-based Neste plants in Singapore and Europe. Three other suppliers provide the balance of the demand – Diamond Green Diesel (a joint venture between Valero Energy and Darling Ingredients Inc.), Renewable Energy Group, and AltAir Fuels owned by Delek US. Only the AltAir plant, the smallest of the four, is located in California.
The state’s Low Carbon Fuel Standard (LCFS) credits reached a value of $100 per metric ton (MT) in late October and remain around that level as of this writing. Some analysts predict the value will more than double by 2019, reflecting expected deficits in the program.
RHD generated almost 628,000 MTs of credits in the fourth quarter of 2016, up about 100 times from 2011. It should be noted there is somewhat limited supply of RHD given the small number of global production facilities. Diamond Green Diesel in Norco, Louisiana, is currently undergoing an expansion that will increase annual production capacity from 160 million gallons of renewable diesel to 275 million gallons and just announced it is analyzing an additional project to expand annual production capacity to 550 million gallons. Refiners and other LCFS credit buyers have paid close to $650 million over the past year. Those costs are typically passed onto consumers at the pump. According to Leigh Noda, a senior associate at Stillwater Associates in Irvine, California, these credits will add 15 to 20 cents per gallon to the cost of fuel over the next two years.
The Golden State will soon be home to a new biodiesel plant and is welcoming a change of ownership in another.
Crimson Renewable Energy, the largest biodiesel producer in California, has again chosen BDI – BioEnergy International AG as the technology provider for a new biodiesel plant that will run alongside its existing facility. BDI completed two major upgrades at Crimson’s facility just last year. The new facility will use BDI’s RepCAT technology, a patented biodiesel production system for low-quality feedstock with high free fatty acids that uses a low-cost recyclable catalyst. The process avoids complex by-product treatment thus reducing operating costs and improving the quality of the biodiesel by-products. The Crimson plant is the first BDI plant in the United States and the third worldwide dedicated to recycling high free fatty acid fats, oils, and greases from metropolitan areas. The other two are in Hong Kong, where trap grease from local restaurants is converted, and the United Kingdom, where fatbergs from the London sewage system are used as feedstock for biodiesel production.
Agron Bioenergy LLC has sold its Watsonville, California, biodiesel plant to Western Iowa Energy LLC. Financial terms of the transaction were not disclosed but included a 15-million-gallon-per-year biorefinery and a small patent portfolio. Agri Beef Company of Boise, Idaho, previously owned the facility but ceased operations last year. Western Iowa Energy has operated a 45-million-gallon-per-year multi-feedstock facility in Wall Lake, Iowa, for over a decade.
Under direct pressure from the White House and a growing bipartisan chorus of United States (US) senators, representatives, state and city governments, and biofuels industry stakeholders, US Environmental Protection Agency (EPA) Administrator Scott Pruitt reversed course on a notice of data availability shortly after it was released in late September. The notice was an attempt to stall EPA’s July proposed rule for 2019 biomass-based diesel renewable volume obligations (RVOs) under the Renewable Fuel Standard (RFS) and find ways to actually reduce them for 2018 and 2019. In July, EPA proposed RVOs of 2.1 billion gallons for biomass-based diesel in 2019.
In a letter Pruitt stated that, “EPA has not taken any formal action to propose this idea, nor will EPA pursue regulations,” referring to the lowering of biofuel mandates under the RFS and allowing ethanol exports to count toward the mandate. Noting that it would be inappropriate for EPA to prejudge the outcome of the final rule for 2018 and 2019 volumes, Pruitt wrote, “Preliminary analysis suggests that all of the final RVOs should be set at amounts that are equal to or greater than the proposed amounts, including at least 2.1 billion gallons for biomass-based diesel in 2018 and 2019.”
The National Renderers Association strongly supports a higher – not lower – RFS since both fuels are important markets for renderers. About 32 percent of US rendered fats and oils produced are used as feedstocks for biodiesel and renewable diesel production.
On October 31, a diverse group of biodiesel producers, fuel retailers, and trucking interests sent a letter to the United States (US) Senate Finance Committee and the House Ways and Means Committee in support of extending and eventually phasing out the biodiesel blender’s tax credit. The letter also outlined their opposition to shifting the credit to a producers’ credit as the tax-writing committees consider tax reform legislation.
David Fialkov, vice president of government affairs for the National Association of Truck Stop Operators, said in a statement, “The blender’s credit has successfully incentivized fuel retailers to incorporate biodiesel into their fuel supply in a manner that enables them to lower their diesel prices. This benefits trucking fleets and drivers who get to pay less money for fuel and it benefits biodiesel producers who have a vibrant, growing demand for their product. The blender’s credit is good for everyone.”
The letter does not support a transition to a producer’s tax credit. “Phasing out the blender’s credit over five years makes sense in the context of comprehensive tax reform where Congress is looking to lower rates, simplify the tax code, and foster economic growth. Shifting to a producer’s credit, on the other hand, is excessively complicated, would create a brand new tax expenditure, and would result in higher fuel prices.”
Many US biodiesel and renewable diesel producers and advocates support the transition to a producer’s credit as an effort to keep taxpayer dollars supporting domestic fuel production rather than going to foreign biofuel manufacturers.
Days after the letter was sent, a comprehensive tax reform proposal was released by the House of Representatives that disappointed National Biodiesel Board (NBB) members as it did not include an extension of the biodiesel tax incentives.
“For decades, stable federal tax incentives for oil and gas have contributed to the world-class, conventional energy industry of today, and NBB encourages legislators to create a similarly stable tax framework for biodiesel and renewable diesel,” said Doug Whitehead, NBB chief operating officer. “As the process moves along, NBB stands ready to work with Congressional lawmakers to craft a robust biodiesel tax incentive that will provide public benefits such as rural job creation, a diversified national fuel portfolio, and fewer toxic pollutants in the air.”
The National Renderers Association is also continuing to work with NBB and lawmakers to include biodiesel tax incentives in comprehensive tax reform proposals moving forward.
A monster 250-meter-long (820 feet) fatberg – a congealed mass of fat, oil, grease, wet wipes, and sanitary products – discovered blocking an east London, United Kingdom, sewer will be converted to around 10,000 liters (2,641 gallons) of biodiesel. The biodiesel will create enough environmentally-friendly fuel to power 350 double-decker Routemaster buses for one day, according to Thames Water Utilities Ltd.
The United Kingdom’s largest water and wastewater services provider teamed up with waste-to-power firm Argent Energy to transform what Thames Water calls “a gut-wrenching, rancid blob” into renewable fuel.
Qantas has announced its Los Angeles, California-based aircraft will be powered by biofuel beginning in 2020, reducing the airline’s carbon emissions on its planes operating between the United States (US) and Australia. The decision follows the Qantas Group’s successful domestic biofuels trail flights in 2012.
Over the next 10 years, the airline will purchase eight million gallons of renewable jet fuel each year from US-based bio-energy company SG Preston. The fuel consists of 50 percent renewable jet fuel produced from non-food plant oils blended with 50 percent traditional jet fuel. Compared to standard jet fuel, the biofuel emits half the amount of carbon emissions per gallon over its life cycle.
A proposed ASTM International standard will help characterize the quality of diesel fuels and biodiesel blends. The proposed standard is being developed by the committee on petroleum products, liquid fuels, and lubricants and will be used to separate and determine the content of aromatics, non-aromatics, and fatty acid methyl esters (FAME) in middle distillates, including biodiesel blends with up to 20 percent by volume of FAME.
December 2017 RENDER | back