What role does biodiesel play in helping industry meet the targets set out in the renewable fuel standard? During today's OnPoint, Anne Steckel, vice president of federal affairs at the National Biodiesel Board, discusses the current condition of the biodiesel market and the impact proposed changes to the RFS could have on her industry.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Anne Steckel, vice president of federal affairs at the National Biodiesel Board. Anne, thanks for coming on the show.
Anne Steckel: Thanks so much for having me, Monica.
Monica Trauzzi: Anne, biodiesel companies were squarely involved in the cases of fraudulent RINs several months back. It's an issue that's still very fresh for some investors, some folks in industry, and also lawmakers. So moving forward, why should lawmakers and consumers trust the industry, trust the market?
Anne Steckel: Well, unfortunately, there were a few cases of RIN fraud a number of years ago. We're very pleased to say that those are issues in the past, and those aren't things that are going on currently. And the industry took a very aggressive approach to tackling these issues head on. We worked with the EPA, we worked with the obligated parties, the petroleum industry, to create a working group to really address the issues and make sure that there was confidence in the market, and we're very pleased to say that those issues are in the past. And right now, EPA is going through a rulemaking, in their final stages of rulemaking a RIN integrity rule that we feel very good about. So we're very pleased with the outcome.
Monica Trauzzi: So what do current market conditions look like, and would you say that there's certain and stability in the biodiesel market?
Anne Steckel: Yes, there is certainty and stability in the biodiesel market. And this actually looks to be our best year ever. Last year, we produced over 1 billion gallons for our industry, and this year, we're on pace to produce well above that. We're required to do 1.28 billion gallons, and we'll likely do around 1.6 or even higher. So this looks to be a very great year for us.
Monica Trauzzi: So you have some strong numbers, but within that, you have very large producers and some small producers. And the small producers were really the ones that were hit the hardest by the RIN issues. How are they doing?
Anne Steckel: Our small producers are doing very well. I think having the certainty in the marketplace and the proactive stance that our industry, along with the petroleum industry and the EPA took in its rulemaking process, has really alleviated a lot of those concerns. And I think that things will improve even more as soon as the rule is final. So we're very, very much looking forward to that.
Monica Trauzzi: So let's talk about the Renewable Fuel Standard. There's a lot of talk in Washington right now about either revising or repealing the standard. We had DuPont on the show a few weeks ago, and they said either a revision or a repeal, they're equivalent. They're going to have the same impact on the industry and the market. Is that your view as well? What's your take?
Anne Steckel: Well, we oppose opening or renewing or revamping the Renewable Fuel Standard in any way. If you look at the Renewable Fuel Standard and you look at biodiesel, biodiesel has been a real success story for the Renewable Fuel Standard. We've met and exceeded our goals, our mandates, under the RFS every year, and we've really contributed to lessening our dependence on foreign oil, improving the environment, rural revitalization, economic security, all of those things. We had 50,000 jobs we supported last year. So for the biodiesel industry, the RFS has been a real success story.
Monica Trauzzi: But for the rest of the industry, there are some issues, so you may, will you get hurt? Will fewer investors perhaps invest in biodiesel as a result of the rest of the industry not being able to meet the requirements of the RFS?
Anne Steckel: We feel very good about the biodiesel market and the investment that we have in the industry, and our projections for this year are going to be very strong. And we're certainly working with members of Congress and the administration to talk to them about how important the RFS has been to us.
Monica Trauzzi: What's your view on how transparent EPA has been in the approval of new renewable fuels?
Anne Steckel: EPA has been very good to work with. We've appreciated the relationships we've had with them, and the transparency that they have had. I think there's always things that everybody can work on, and moving forward, we hope to work with them and make the process as streamlined as possible.
Monica Trauzzi: Biodiesel was granted a retroactive tax credit earlier this year, and many feel that that sort of led to a lot of the success that you've seen in recent months. How critical has that tax credit been, and do you count on the government for continued to support on that front?
Anne Steckel: The tax credit has been incredibly important to the biodiesel industry. It certainly has helped us propel our industry and our growth, and we've appreciated having that tax credit, because it's really helped with our infrastructure. You have to remember, we're a really small industry. Although we're a billion gallons, which we're very proud of, we're working in a 60 billion gallon diesel pool. So we're still a very young and small industry.
Monica Trauzzi: All right. A lot going on in this sector. Thank you for coming on the show.
Anne Steckel: Thank you for having me.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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