Markets and farmers react to “baffling” EPA biofuels decision
The entire soy complex will have expanded limits in Thursday trading after soyoil on Wednesday was locked limit down.
The markets were reacting to EPA’s new rule under the Renewable Fuel Standard through 2025.
Expanded limits for Thursday beans will be $1.60, meal $45, and soyoil $0.06.
While EPA slightly raised requirements for biomass-based diesel fuels, the agency lowered ethanol quotas.
Biofuel blending requirements are 20.94 billion gallons in 2023, 21.54 billion gallons in 2024, and 22.33 gallons in 2025. The finalized volumes include 15 billion gallons of ethanol over the next three years, which is a decline from the proposal the agency released in December.
Corn growers and ethanol groups say the volumes are set at roughly one-third of what industry advocates recommended, and the rule does not accurately reflect the growth expected in the industry. It also falls far below the industry’s current production.
“EPA is undercutting the certainty that our industry hoped for from a three-year RFS rule,” said Kurt Kovarik, vice president of federal affairs with Clean Fuels Alliance America. “U.S. clean fuel producers, oilseed processors, fuel distributors and marketers have all made significant investments to grow the industry rapidly over the next several years. The industry responded to signals from the Biden administration and Congress aiming to rapidly decarbonize U.S. fuel markets, particularly aviation, marine, and heavy-duty transport, and make clean fuels available to more consumers. The volumes EPA finalized today (Wednesday) are not high enough to support those goals.”
“This announcement is a letdown for soy growers,” said American Soybean Association President Daryl Cates. “It threatens the success of the biomass-based diesel industry by significantly dialing back annual increases in volume obligations and failing to account for the progress being made in biofuel investment and growth. Farmers and biomass-based diesel producers face real, concerning consequences from low RFS volumes that do not reflect current production and demand, and we’re disappointed in this lack of support for the industry.”
ASA has called on EPA and the Biden administration to raise volumes to a level that will continue to support growth of the industry.
In a news release, the Minnesota Soybean Growers Association said it was baffled by the decision.
“We’re very disappointed. The EPA just doesn’t seem to prioritize renewable fuels and recognize the many ways in which biodiesel improves our environment and economy,” said MSGA President Bob Worth said, who farms in Lake Benton. “Even when we prove time and time again that this is a good product that does what it’s supposed to, they just have their mindset in one direction.”