"This is good news for Iowa as one of the leading biodiesel- and soybean-producing states," says Delbert Christensen, ISA president and a soybean farmer from Audubon, Iowa. "Today's rule affects jobs in the biodiesel industry in addition to affecting soybean farmers by ensuring there will continue to be a baseline of demand for soybean oil. Studies show increased demand for soybean oil has helped bolster prices in recent years."
Biodiesel is only fuel available in large enough amounts
EISA was enacted on December 19, 2007. The legislation expanded the Renewable Fuels Standard and for the first time specifically provided for a renewable component in U.S. diesel fuel. RFS2 requires the combined 2009 and 2010 domestic use of 1.15 billion gallons, and after that, at least a billion gallons each year. To qualify as biomass-based diesel, the fuel must reduce greenhouse gas emissions by 50% compared to petroleum diesel.
Biodiesel is the only fuel available in commercial quantities in the U.S. that meets the definition of biomass-based diesel.
On May 26, 2009 EPA issued the proposed rule to implement the RFS2 program. The proposed rule contained several significant flaws that were highlighted in comments made by ISA, as well as others in the soybean and biodiesel industries. Many of these concerns have been addressed in the final rule. Among them, GHG methodology used in the final rule has been updated to reflect industry comments, and biodiesel produced from domestic soyoil is assumed to reduce GHG emissions by 57% compared to petroleum diesel fuel, and EPA's uncertainty analysis recognizes that the GHG reduction could be as high as 85%.
Agriculture, biodiesel industry concerned about Indirect Land Use
Though there is still concern in the agricultural and biodiesel industries about the use of international indirect land use change in EPA's GHG methodology, the methodology employed in the final rule represents a significant improvement over the proposed rule.
Ray Gaesser from Corning, who serves as an ISA director and is also vice president of the American Soybean Association (ASA), personally participated in several meetings with representatives of EPA to discuss issues with the proposed ruling. The first occurred in September, when Director of the EPA's Office of Transportation and Air Quality Margo Oge and Assistant Administrator for EPA's Office of Air and Radiation Regina McCarthy, along with other EPA associates, accepted Sen. Charles Grassley's invitation to come to Iowa.
In addition to visiting with researchers at Iowa State University and a tour of a biodiesel plant, their visit included a stop at the Kimberley farm at Maxwell in central Iowa. It was the first time they had visited a working farm to learn firsthand about modern U.S. agriculture and see how soybeans are grown.
While there, Gaesser and other representatives of ISA addressed issues with the proposed ruling. At the end of that day, the EPA staff invited ISA to come to Washington and continue the discussion.
EPA officials' visit to Iowa last fall was very worthwhile
"That meeting turned the tide," says ISA director of market development Grant Kimberley. "Thanks to the combined efforts of Sen. Grassley and others who participated in that discussion, a lot of goodwill was created that led to mutual openness for dialogue. That opened the door to our making comments to address revisions that needed to be made in the rule."
The second visit between ISA and the EPA occurred in Washington, D.C., in November. At that meeting the discussion addressed the issues of having to certify that soybeans were not grown on new land, as well as problems with the proposed rule regarding climate change and indirect land use.
"I believe the information ISA presented to the EPA proved valuable in having a favorable ruling in the RFS2," Gaesser says. "We were able to provide data from our Environmental Programs and our On-Farm Network research that was much more favorable and showed that modern soybean production is much more efficient than was shown by the information they had from USDA, dating back to the 1980s. Thanks to effort made by soybean farmers, it ended quite favorably. This is truly valuable to the future of biodiesel. At the same time we still need Washington to come through with the tax incentive for biodiesel, as well."