Last month, U.S. EPA released its 2017 renewable fuel standard proposal. It comes as the agency's 2014-2016 targets are being challenged in court. How is the biofuels industry managing the political and legal uncertainties surrounding the RFS? During today's OnPoint, Anne Steckel, vice president of federal affairs at the National Biodiesel Board, explains how she believes EPA should adjust its 2017 RFS proposal to better reflect market trends.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Anne Steckel, vice president of federal affairs at the National Biodiesel Board. Anne, thank you so much for coming back on the show.
Anne Steckel: Thank you so much for having me.
Monica Trauzzi: So Anne, last month U.S. EPA released its 2017 RFS proposal. This comes at the same time that the 2014-2016 targets are being challenged in court. What is your takeaway from the 2017 proposal?
Anne Steckel: Well we think EPA is moving in the right direction in terms of increasing volumes for biomass-based diesel as well as advanced biofuels. However, we think that EPA missed the mark and that the volumes should be higher. So the National Biodiesel Board is advocating for an increase from the 2.1 billion gallons that was proposed to 2.5 billion gallons for biodiesel and then also an increase in advanced.
We have so much untapped production in the country, availability of feedstocks and this is a great industry and we think that EPA should embrace that and grow the volumes to reflect the support across the country.
Monica Trauzzi: Is your sense that they may be trying to focus on a gradual increase and potentially in 2018 see a larger portion going to biodiesel?
Anne Steckel: Well what we think is that there's a real opportunity for EPA to move forward with more robust volumes. We have about 60 percent of our capacity is only being utilized at several of our plants across the country, which really means that EPA has an opportunity to further advance fuels.
Biodiesel is the No. 1 advanced biofuel and we fill about 90 percent of that bucket. So we think EPA has this opportunity to move more aggressively to a 2.5 billion-gallon number.
Monica Trauzzi: So now that the proposal is out, does the industry have the level of certainty it's been calling for? There was a lot of talk about the biodiesel space seeing some damage as a result of having to wait for the targets.
Anne Steckel: Well we are thankful that EPA is getting the program back on track from a timing perspective. However, we really need the volumes to reflect the production capacity that's out there. We have such an amazing opportunity to grow this program to really embrace advanced biofuels.
People talk a lot about what's going on with climate change and emissions reductions, and biodiesel reduces those carbon emissions by 57 to 86 percent. So EPA has this great opportunity. We're going to be working very closely with them in the next couple of months before the comment period closes to make sure we get those volumes up to reflect the ideas and the initiatives that are out there.
Monica Trauzzi: So how do you think the 2017 proposal positions biodiesel as a contributor to carbon reduction?
Anne Steckel: Well certainly if you look at what is the biggest way to reduce carbon emissions from the transportation sector, the RFS is an absolute way to do that. We think that the administration should embrace the RFS as a way to reduce carbon emissions. Biodiesel does reduce carbon emissions. It's the largest commercially scale available way to reduce the carbon emissions through the diesel sector.
So we think the administration should really look at those figures, embrace them and grow the industry.
Monica Trauzzi: How does the current environment of political and legal uncertainty affect growth for your industry?
Anne Steckel: Well certainly the more stability we have, the better issues and we will be able to grow our industry. So we're asking for the administration to be consistent in growing the volumes, but grow them in a way that allows our members to really utilize all of that capacity and that production out there.
Certainly with the elections coming up there's a lot of uncertainty with what'll happen. There's not a lot of legislating going on right now. So we will revisit some issues that are important to our industry, such as tax issues. There's a biodiesel production tax incentive that we've been working on and I think we'll revisit those after the election.
Monica Trauzzi: In the lame duck or next year?
Anne Steckel: We hope it'll be in the lame duck. I think that there'll be an opportunity for Congress to come back after the elections and do some of these outstanding issues that they need to get off their plate and certainly tax issues is right at the top of that.
Monica Trauzzi: So Congress continues to somewhat focus on the RFS still holding many hearings, but as you said, not necessarily legislating. Do you think we could see the focus increase from Congress as the court case moves forward/
Anne Steckel: I think that Congress has really taken a wait-and-see approach. There was a hearing this week that I testified on on behalf of the RFS and some oversight issues and things of that nature. Congress is really looking at what the courts are doing, what the EPA is doing and figuring out if there's a role for them. I think next year there may be an opportunity for them to act on it, but right now I think they're reviewing everything that's out there and seeing the best course of action.
Monica Trauzzi: We'll of course have to see the makeup of the House and Senate next year as well.
Anne Steckel: It'll be exciting.
Monica Trauzzi: A lot of emotion. We'll end it there. Thank you for coming on the show.
Anne Steckel: Thank you.
Monica Trauzzi: Thanks for watching. We'll see you back here tomorrow.
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