Platts

September 26, 2017

The US Environmental Protection Agency said Tuesday it was considering cutting by up to 15% how much advanced biofuel and biodiesel must get mixed into the US fuel supply in 2018 and 2019, based on a potential spike in biodiesel prices.

The agency said new US duties expected on imports of biodiesel from Argentina and Indonesia, coupled with the expiration of a federal tax credit at the end of 2016, could disrupt biodiesel supply and drive up prices.

It asked industry in a regulatory notice to weigh in on that possibility and comment on whether EPA has statutory authority to cut volumes under the Renewable Fuel Standard. As of early Tuesday afternoon, there was no closing date for the comment period.

"EPA remains concerned about the high cost of advanced biofuels," the notice said.

RIN prices quickly reacted to the notice, plunging after a morning uptick.

Biodiesel (D4) RINs for 2017 compliance traded as low 95 cents after S&P Global Platts assessed them at $1.0375 on Monday. Ethanol (D6) RINs also tumbled, trading as low as 75 cents after Platts assessed them at 83.5 cents Monday.

In July, EPA proposed requiring refiners and blenders to mix 19.24 billion gallons of total renewable fuel, including 4.24 billion gallons of advanced biofuel, in 2018. It proposed the 2019 biodiesel blending mandate at 2.1 billion gallons.

Cutting the advanced biofuel and biodiesel portions of the blending mandate would also lower the total volume to keep conventional ethanol's share from climbing above 15 billion gallons.

EPA said the expiration of the $1/gal biodiesel blenders tax credit at the end of 2016 has had a significant impact on the effective price of biodiesel sold to blenders.

"We also expect the price of biodiesel used in the US could increase further following a recent preliminary determination by the Department of Commerce that it would be appropriate to place countervailing duties of 41%-68% on imports of biodiesel from Argentina and Indonesia," the notice said.

The Commerce Department is expected to make a final decision on the countervailing duty orders on December 29.

A biofuels trader said the cuts contemplated by EPA would zero out any gains domestic biodiesel producers were hoping to realize from countervailing duties.

"It was like, 'Here you go, we will impose duties on imports. Oh and by the way, for that we are reducing demand domestically,'" the trader said.

Read the original article: US EPA Considers Cutting 2018-19 Advanced Biofuel Mandate on Biodiesel Supply

Ag Web

September 26, 2017

On Tuesday, the Environmental Protection Agency (EPA) announced they wanted comments for the potential options for reducing biofuels and renewable fuel volumes lower than those proposed in the 2018 Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS).

The Notice of Data Availability (NODA) issued by the EPA outlined how the EPA could reduce the 2018 biofuel volume requirement from a proposed 4.24 billion gallons to 3.77 billion gallons, and the total renewable fuel volume requirement from a proposed 19.24 billion gallons to 18.77 billion gallons.

These proposed decreases are driven by concerns over biofuel imports.

Bob Dinneen, president and CEO of the Renewable Fuels Association, issued a statement, explaining his continuing frustrations to the proposed cuts from the EPA. It reads in part:

“There is no rationale for further lowering either the 2018 advanced biofuel volume requirement or the total renewable fuel volume…We see no statutory basis whatsoever for attempting to limit biofuel imports through the use of a general waiver.”

Sen. Chuck Grassley (R-Ia.) expressed his concerns about the opportunity for the public to comment on the potential reductions. His statement reads in part:

“It’s outrageous that the EPA would change course and propose a reduction in renewable fuel volumes. This seems like a bait-and-switch from the EPA’s prior proposal and from assurances from the President himself and Cabinet secretaries in my office prior to conformation for their strong support of renewable fuels. That’s contrary to the goal of America first. I plan to press the Administration to drop this terrible plan.”

Read the original article: Grassley: Proposed Biofuel Reduction Seems Like "Bait-And-Switch"

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New York Times

September 13, 2017

By Reuters

It could also mean building as many as 36 new plants each with 300,000 tonnes per year of capacity at an estimated cost of 36 billion yuan, according to Reuters calculations based on experts' estimates.

Those factories would need 45 million tonnes of corn as feed, potentially depleting the government stockpile in just over four years.

Experts question how Beijing will implement the plan so quickly and on such a vast scale, but Beijing is likely to take a leaf out of the United States' play book.

Its decade-old renewable fuels policy illustrates how government backing has transformed the U.S. cornbelt and built a biofuels sector. Ethanol demand soared by 208 percent and industrial corn use more than doubled between 2005 and 2010.

But the seeds of ethanol growth in China - the first in a decade - emerged this year already, as firms sought to take advantage of lower corn prices and hefty import tariffs on ethanol introduced in January, fueling the plant construction in the northeast.

Read the original article: China Set for Ethanol Binge as Beijing Pumps Up Renewable Fuel Drive

Owatonna People's Press

September 7, 2017

By William Morris

AgNet West

September 6, 2017

The U.S. Department of Agriculture (USDA) and the Office of the U.S. Trade Representative (USTR) announced that the government of Vietnam has notified the U.S. that it will resume imports of American distillers dried grains (DDGS).  In December 2016, Vietnam suspended imports of U.S. DDGS after reported detections of quarantine pests in U.S. shipments.  Prior to the suspension, Vietnam was the third-largest market for U.S. DDGS, with exports valued at more than $230 million in 2016.  The resolution of this issue also opens the way for corn and wheat shipments, which were restricted due to previous treatment requirements.

DDGS are a co-product of ethanol production and are used as an ingredient to provide protein and energy in animal feed.  Between 2007 and 2016, annual U.S. exports of DDGS worldwide grew from $392 million to $2.16 billion.

The DDGS ban is one of several agricultural and other priority issues raised in connection with Vietnamese Prime Minister Nguyen Xuan Phuc’s visit to Washington in May 2017, where he met with President Trump as well as Secretary of Agriculture Sonny Perdue and U.S. Trade Representative Robert Lighthizer.  Following the series of meetings, the two governments released a joint statement pledging to work closely together to resolve the DDGS issue.

“This is great news and I am pleased that the U.S. exporters will once again be able to ship DDGS to Vietnam, which is one of the fastest-growing global markets for U.S. agriculture,” said Secretary Perdue.  “Expanding markets around the world can only help American agriculture.”

“We welcome the resolution of this issue, which will help in our efforts to balance trade and deepen our trade relations with an important Asia-Pacific partner,” said Ambassador Lighthizer.

Following the suspension, representatives from USDA’s Animal and Plant Health Inspection Service (APHIS) engaged in technical discussions with Vietnam’s Ministry of Agriculture and Rural Development regarding alternative treatment options that would allow U.S. exports to resume.  APHIS and USDA’s Foreign Agricultural Service (FAS) and Federal Grain Inspection Service then partnered with industry to host a delegation of Vietnamese officials to view the U.S. fumigation and export infrastructure.  USTR, FAS, and U.S. Embassy officials also met with their counterparts in Vietnam.

The U.S. Government continues to work with Vietnam to address other priority agricultural issues.  These include Vietnam’s adoption of Codex Maximum Residue Limits for veterinary drugs, as agreed during Prime Minister Phuc’s May visit, as well as removal of Vietnam’s ban on “white offal.”

Read the original story: Vietnam Reopens Market to U.S. DDGS Exports

A recent study by the European Commission Directorate-General for Climate Action identifies E20 as the optimal ethanol blend for the EU.

Biofuels International

August 29, 2017