U.S. Biodiesel Makers Balk as Obama Clears Argentine Imports

(Bloomberg) — Biodiesel makers are complaining that the

U.S. Environmental Protection Agency is allowing imports from

Argentina while failing to comply with a law meant to encourage

domestic production.

The EPA on Tuesday cleared more imports of Argentine

biodiesel made from soybeans. U.S. biodiesel makers fear

competition from low-cost Argentine producers and complain that

the EPA cleared that application while failing to set the

required minimum production targets for 2014. It also missed a

legal deadline for the 2015 quota.

“Our plants are laying off people here, and EPA makes a

decision helping producers in Argentina. Go figure,” Anne

Steckel, director of federal affairs at the National Biodiesel

Board, said Friday on a conference call.

The EPA’s troubled management of the so-called Renewable

Fuel Standard has angered lawmakers of both political parties as

well as producers of alternatives to gasoline. The EPA has a

legal deadline of setting quotas for ethanol and other biofuels

each December. It was so late in setting the 2014 quotas, that

it gave up and said it would do so retroactively, leaving

refiners and producers to guess at what it would demand. The

agency hasn’t set a deadline the delayed 2015 quotas.

‘Legal Options’

An EPA official said that its import approval is done by a

separate set of officials from those setting annual quotas.

“It’s two parallel pieces,” said Byron Bunker, director

of the compliance division of the EPA Office of Transportation

and Air Quality. Bunker said the plan submitted by the Argentine

producers provides for an outside survey to ensure that the

lands used to grow the soybeans weren’t recently cleared from

forest. That’s a standard established in the law.

“We like this approach because it has third-party

verification,” he said.

The biodiesel board sent a letter to EPA Administrator Gina McCarthy Friday, asking her to reconsider the decision, chief

executive Joe Jobe said. If it doesn’t, the group “has a number

of legal options that we’ll consider,” he said.

Without quotas, producers say they are having a hard time

finding a market for their products. Corn-based ethanol makes up

the largest share of the biofuel market. Biodiesel, which is

often made from soybeans but also from waste cooking oil, is

also a significant market, expanding to about 1.8 billion

gallons in both 2013 and 2014.

The 2005 law was designed to encourage the use of renewable

fuel and lessen U.S. dependence on imported oil. Refiners such

as Exxon Mobil Corp. and Valero Energy Corp. are required to add

a certain amount of renewable fuels to gasoline and other

products each year to meet guidelines in the law and interpreted

by the EPA.

The law sets up a way for foreign producers to certify that

production doesn’t lead to clearing of forested land. Individual

Argentine biodiesel makers had already been cleared for import

before Tuesday’s decision.

To contact the reporter on this story:

Mark Drajem in Washington at

mdrajem@bloomberg.net

To contact the editors responsible for this story:

Jon Morgan at

jmorgan97@bloomberg.net

Steve Geimann

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