Biodiesel

White House Sets Record Biofuel Volumes for 2026 and 2027

Fri, 27 Mar 2026 18:36:32 GMT

In the 20th year of the Renewable Fuel Standard (RFS) program, the White House has established the renewable fuel volume requirements for 2026 and 2027 at the highest levels in program history. The Set 2 final rule, announced at the White House Great American Agriculture Celebration in front of 650 invited attendees, realigns the program with Congress’ intent to increase the use of homegrown American biofuels.

“Today’s announcement is truly historic for our nation’s farmers and energy producers. These numbers represent the highest levels of biofuels ever required to be blended into our fuel supply,” says Brooke Rollins, Secretary of Agriculture. “With President Trump and Administrator Zeldin’s leadership, these historically high volumes are expected to create a $3 to $4 billion increase in net farm income. The Renewable Fuel Standard Set 2 Rule will create a $31 billion dollar value for American corn and soybean oil for biofuel production in 2026, which is $2 billion more than in 2025. Our farmers are stepping up to grow American energy dominance.”

Just this week, EPA renewed emergency waivers for E15 gasoline sales during the summer driving season.

What Does the Set 2 Final Rule Mean for Farmers

To meet the 2026 and 2027 volume levels, EPA estimates biodiesel and renewable diesel production and use will need to increase by more than 60% versus 2025 volumes. The increase was above the initial proposal.

“The proposal that we saw nine months ago was extremely robust,” explained Kurt Kovarik of the Clean Fuels Alliance America. “In fact, our industry, along with the petroleum sector and the soybean growers, asked for a volume requirement for 2026 of 5.25 billion gallons. They proposed 5.61 billion gallons. And today’s proposal is right in that neighborhood between 5.5 to perhaps as high as 5.6 or 5.7. There’s a little bit of math yet that needs to be done.”

He said that in 2025, biodiesel and renewable diesel facilities were forced to shut down or run far below prior-year production levels due to market uncertainty. U.S. biodiesel production declined by one-third in 2025, compared to 2024.

“Biodiesel and renewable diesel represent 10% of the value of every bushel of U.S.-grown soybeans, contributing to President Trump’s desire for American energy dominance and domestic market demand for agriculture commodities,” said Kovarik. “American farmers and other feedstock providers are eager for the growing domestic clean fuel market to drive value in agriculture, along with economic growth and job creation in rural communities. American consumers are desperate for secure, affordable domestic energy. Today’s rule is a clear win for the nation’s energy security.”

With the benefits Set 2 will bring to America’s farmers, EPA estimates the rule will generate more than $10 billion for rural economies and create more than 100,000 new jobs in the agricultural and manufacturing sectors. To provide continued certainty for American corn growers and ethanol producers, EPA will maintain the 15 billion conventional biofuel level for 2026 and 2027.

Based on EPA’s latest release on March 27

(EPA)

What are Renewable Volume Obligations?

RVOs are targets set by EPA to determine how much renewable fuel must be blended into the U.S. transportation fuel supply. EPA determines the total volume of different categories of biofuels that should be used in the country for multi-year periods. Once decided, EPA converts the total volumes into percentage standards, which represent the ratio of renewable fuel to the total amount of gasoline and diesel expected to be consumed in the U.S. that year.

Each “obligated party,” typically refiners and importers of gasoline and diesel, calculates its RVO by multiplying EPA’s percentage standards by the total volume of non-renewable gasoline and diesel they produce or import. To prove they have met their RVO, obligated parties must use a serial number attached to each gallon of biofuel, known as Renewable Identification Numbers (RINs). When the biofuel is blended into the fuel supply, the RIN is “separated” from the physical fuel.

At the end of the compliance year, obligated parties must submit to EPA enough RINs to cover their specific RVO. If a refiner blends more biofuel than required, they can sell their excess RINs to other refiners who have not met their obligations.

Adjusted Small Refinery Exemptions

The EPA also finalized the reallocation of the volumes from Small Refinery Exemptions from 2023 through 2025. Those are now set at 70%.

“Adding it to the top line volume for 2026 and 2027, the volumes that were waived over those three years will be made up in 2026 and 2027,” Kovarik. “For our industry, that’s somewhere between an additional 200 to 250 million gallons a year.”

He says that is on top of the already robust minimum volume that EPA set. The agency claims the RFS rule will create $31 billion in value for American corn and soybean oil.

Renewable Fuels Association (RFA) President and CEO Geoff Cooper noted that while they advocated for full reallocation of the 2023-2025 SREs, the 70 percent reallocation included in today’s rule is better than other options that were under consideration. EPA had proposed 50 percent reallocation as an option and also solicited public feedback on no reallocation at all.

“We continue to believe small refinery exemptions are completely unjustified, and the SRE petition process—including EPA’s reliance on the Department of Energy’s ‘scoring matrix'—is fundamentally flawed,” Cooper said. “SREs distort the market, undermine fair competition, and destabilize the RFS program. And while RFA appreciates EPA’s efforts to minimize market disruptions by reallocating most of the renewable volume lost to SREs, we believe the Agency has a duty to fully restore all exempted volumes.”

RVO Reaction Pours In

The Renewable Fuels Association (RFA) and other farm groups applaud the RVO announcement from EPA.

“Today’s RFS rule supports continued growth in American-made renewable fuels like ethanol and brings much-needed certainty and stability to the marketplace,” said RFA on X.com .

Today’s RFS rule supports continued growth in American-made renewable fuels like #ethanol and brings much-needed certainty and stability to the marketplace. We are grateful to @POTUS and @epaleezeldin.https://t.co/FdovzBqLUr
— Renewable Fuels Association (@EthanolRFA) March 27, 2026

“Congress intended year-to-year renewable fuel blending to increase under the RFS and today’s announcement with the highest-ever volume obligations helps fulfill their intention,” said Brian Jennings, CEO for American Coalition for Ethanol. “We’ve consistently advocated for strong final blending obligations for 2026 and 2027, reflecting the full potential of the RFS and ensuring small refinery exemptions (SREs) do not erode demand for renewable fuels.”

Jennings says the integrity of the RFS depends on ensuring volume obligations translate into real-world demand. Any gap between required volumes and actual blending undermines the program and creates uncertainty for ethanol producers, farmers, and rural communities.

“We appreciate President Trump, Administrator Zeldin and Secretary Rollins for delivering strong RVO volumes and doing so in a way that recognizes the importance of American farmers,” said NSP Chair Amy France, a farmer from Scott City, Kan. “These volumes provide critical certainty for sorghum producers and help strengthen demand across the biofuels sector.”

NSP also highlighted EPA’s decision to reallocate 70 percent of previously exempted volumes, helping ensure that promised demand is realized.

“Maintaining the integrity of the Renewable Fuel Standard is essential,” France said. “Reallocating those gallons helps protect the market opportunities farmers depend on. We need to build on this momentum and get year-round E15 across the finish line.”

Ohio farmer and National Corn Growers Association President Jed Bower, who was present at the White House for the announcement, also weighed in on the latest volumes.

“Our deep thanks go to President Trump and Administrator Zeldin for releasing these robust RVO numbers in an exceptionally timely manner and, appropriately, during an event honoring America’s farmers. This action provides certainty to corn farmers across the country who rely on a stable biofuels industry. Today’s announcement, coupled with the Trump administration’s E15 summertime waiver earlier this week, is a positive move for the nation’s corn growers who are navigating an exceptionally difficult economic environment. There is still more to be done to help our growers, and we look forward to working side-by-side with the president and our allies in Congress to get permanent year-round E15 legislation over the finish line.”

Fuel and Fertilizer Costs Surge

While there’s hope that embracing biofuels can help bolster the farm economy and lower prices at the pump, farmers are feeling the fallout of higher oil prices. According to AAA on Friday, the national average for a gallon of diesel fuel was $5.38. That’s nearly $2 per gallon higher than it was just a year ago, and it’s happening right as farmers gear up for the spring planting season.

“To help lower gasoline prices for farmers and consumers, this week, I issued an emergency order to allow immediate sales of E-15 — and just as I promised in the campaign, I’m seeking Congressional action to allow E-15 all-year-round,” said President Trump.

Fertilizer prices are also significantly higher in the last few weeks. While some farmers pre-applied acres last fall and others bought earlier in 2026, there are still a number of acres left to cover.

Can Biofuels Make Up for Lost China Soybean Export Demand?

Mon, 08 Sep 2025 18:21:07 GMT

China has still not bought one bushel of new crop soybean exports from the U.S. and they may not with U.S. product facing up to a 23% tariff.

Last year at this time China had bought 250 million bu. of U.S. soybeans but this year is buying from South America and without a China deal the U.S. could miss its prime export window which will further pressure soybean prices.

Can BioFuels Make Up for Lost China Export Business?

Due to the expected increase in demand for biofuels like renewable diesel and SAF the soybean processing industry was planning a 30% increase in crush capacity with the use of soybean oil as a feedstock.

With recent biofuels policy wins that finally looks more promising but experts says the biofuels ramp up won’t come soon enough to make up for lost exports to China.

Trifecta of Biofuels Policy Wins

The U.S. biofuels industry has had a trifecta of policy wins the last few months including EPA’s higher than expected proposed blending mandates for biomass based diesel according to Dr. Scott Irwin, Agricultural Economist, University of Illinois.

He says, “It started with the June Renewable Volume Obligations (RVOS’s) which were very healthy and included a what is called a half RIN proposal for imported biofuels or domestically produced biofuels made with imported feed stocks.”

A second positive was, as part of the One Big Beautiful Bill, the industry saw some much needed changes to the 45 tax credit program.

Steve Censky, Chief Executive Officer, American Soybean Association says the bill delivered many of the components they had asked for.

“Number one was to extend it because it was going to be expiring in 2028. And so it’s been extended for a couple of years. And then second thing is that we push to make the 45Z tax credit only available to fuels made with U.S. feed stocks,” he ssays.

Irwin says the third part of the hat trick was EPA’s decision on the backlog of Small Refinery Exemptions.

Irwin says, “We got an SRE refinery exemption u decision uh that stretches back going all the way back to 2016 that uh I believe is quite favorable as well.”

Biofuels Industry Awaiting Guidance on RVOs and 45Z

However, the biofuels industry has been waiting nearly two years for Treasury guidance on 45Z to get certainty for investment.

Irwin says, “We still have to wait to see what that guidance looks like. But the important point is that historically historically when those tax credits are awarded either to the uh blender or the producer they bid most of that into their feed stock prices.”

Censky says they also need finalized RVO levels from EPA, which are expected by October 31.

Censky, “f we can finalize the volumes that have been proposed by the EPA, and they propose to expand biomass-based diesel volumes by 67% from 2025 levels. So really historic announcements about the volumes. That really gives potential here for the biomass-based diesel industry.”

But that demand won’t kick in until January of 2026, so can biofuels make up for the loss of China?

Biofuels Ramp Up Too Late to Offset Lost China Exports

Irwin says, “The big thing of course is no matter how bullish you want to get on biofuels it doesn’t replace China on the soybean export side.”

Censky says that’s because while the U.S. soybean industry diversified its export portfolio since the 2018 trade war with China, it still buys over 25% of the soybean crop annually.

“I mean they import more soybeans than the rest of the world combined and so you can’t make up the loss of the China market by gaining a little bit here or there,” he explains.

And with up to 23% tariffs on U.S. soybeans, Censky says China is out of the new crop export market.

“So you’re talking 200 to 400 million bushels of soybeans that they would have purchased already that would be on the books and right now we have zero and what we’re hearing is that they’ve taken care of their needs for October, they’re taking care of their needs for November.” he says.

And without a deal, China could stay out of the U.S. export arena waiting for Brazil’s new crop soybeans to come to market.

EPA Decision on Small Refinery Exemptions Good News For Biofuels

Mon, 25 Aug 2025 18:19:15 GMT

The Environmental Protection Agency had a big announcement on Small Refinery Exemptions (SREs) on Friday.

The agency is acting on a backlog of more than 175-petitions from 38-small refineries dating all the way back to 2016.

EPA officials says the goal is to get the Renewable Fuel Standard (RFS) program back on track but biofuels industry officials are unclear about how that will work.

SRE Decision a Mixed Bag

EPA granted full SREs on 63 petitions to the Renewable Fuel Standard, and partial exemptions on 77. The agency also denied 28 petitions and deemed 7 ineligible.

Paul Winters, Director of Public Affairs, Clean Fuels Alliance America says the result was a good news, bad news story for the industry.

“The exemptions apply to more than 7 billion RIN gallons from prior years. However, EPA is indicating that it’s only returning RINs for 2023 and 2024, which is about 1 .4 billion RINs. Those RINs would still be valid to meet the 2024 RFS volume requirements.”

Will the 2023 to 2025 SREs be Reallocated?

The biofuels industry exoects multiple refiners to object to the decision. So the question remains: how or if the SREs from 2023 to 25 will be reallocated.

Winters says, “1.4 billion RINs returned to the market is a substantial number, especially for 2024 and 2025 where the Biden administration set volumes for biomass based diesel way below where they should have.”

EPA Proposes New Formula for Reallocating SREs

In addition, EPA has proposed a new formula to reallocate gallons exempted from 2023 and later years.

This means EPA still has 57 total exemption requests pending that will be used in finalizing blending levels for 2026 and 2027.

“So what EPA has indicated is that they are going to propose a rule, a supplement to the 2026 and 2027 volumes and they will reallocate the these small refinery exemptions to other refiners,” he says.

So, while the administration is trying to support the biofuels industry, it’s still negative according to Winters.

“They exempted far more small refineries than anyone thought would have,” he explains.

Timeline Unclear

Winters says EPA will send a proposal to the White House next week for a 30 day review, followed by a comment period and hearing on the new proposal.

Eventually the plan is to add this proposal to, for the new framework or small refinery exemption decisions and add it to the 2026 and 2027 RFS rule.

Winters says CFAA will work with EPA on the re-allocations but his will delay the final 2027 RFS rule past the November 1 deadline — adding more uncertainty.

5 Things Farmers Should Know Now 45Z Is A Real Thing

Mon, 07 Jul 2025 22:09:52 GMT

The One Big Beautiful Bill (OBBB) delivered additional surety for the 45Z biofuel blender tax credit.

After almost three years of talking about what could be spelled out by 45Z, Mitchell Hora says farmers can now get “locked in” to capitalize on the program.

“This 45z deal could be absolutely game changing for my family’s farm, and I think it will be game changing for other family farmers across the country,” Hora says. “It’s going to have a ripple effect that could change global agriculture. So that’s why I’m just so adamant that we have got to get this right, and we’ve got to hit the ground running.”

Hora, an Iowa farmer and founder of Continuum Ag, says there are five things every farmer should know about what the OBBB has laid out. He also says there are unanswered questions.

1. It’s happening.

“They [lawmakers] cut almost all of the other green funding programs within the Inflation Reduction Act. They cut a bunch of that old stuff, but they kept the 45Z program,” Hora says. “It’s alive, it’s locked in, it’s going to happen.”

What sets 45Z apart from previous biofuels tax provisions is how it measures the grain—the program uses a scorecard to assess every bushel (not acre) with a carbon intensity (CI). Any score under 50 points receives a tax credit to the biofuels producer.

“This program shows how you can score a farmer’s carbon footprint, how you can audit it, verify it, track it through the supply chain, and how to monetize it,” Hora says.

2. OBBB gave 45Z an extension

The 45Z program now has additional momentum behind it as the OBBB outlined an extension now into 2029.

“Now biofuels producers have more time to really capitalize on this,” Hora says.

The program is currently active for the 2025 tax year. This means farmers could be selling 2024 grain into the 2025 biofuels production year. And the program is available through 2029.

3. Only North American feedstocks are eligible.

Imported used cooking oil has become a focus for may who have critiqued previous blend credits as feedstocks from other countries were not limited.

Now, only feedstocks from North American sources can be used as part of this program. This includes corn, soybeans, used cooking oil, beef tallow, and canola.

“Without foreign feedstocks being included this drives more demand and more value for U.S. farmers,” Hora says.

4. Current language ignores indirect land use change.

“This single thing lowers everyone’s CI score across the board. It definitely helps corn and corn based ethanol and the soybean side as well,” Hora says.

5. Tax credits are transferrable.

Biofuels producers can take their tax credits and sell them to another buyer if they aren’t going to use them themselves.

Additionally, this makes it easier for farmer-owned co-op ethanol plants to process their taxes.

Additional considerations and unanswered questions.

Farmer data is key to unlock the potential.

“The overall 45Z impact is ag data is extremely valuable. It’s setting a precedent as to the value for data,” Hora says. “Iin order for the ethanol plant to generate 45Z credit using your low carbon farming practices, they have to prove it in an audit, and likely an audit at every point of aggregation, so that farmer data is really the key to unlock value here.”

As for the monetary value of the CI score, Hora says after talking to hundreds of ethanol plants, the range of sharing the value of the credit varies between 30% to 50% of the value.

This 45Z program update does effect sustainable aviation fuel—particularly alcohol to jet.

“Under the current version of 45z the alcohol to jet pathway not going to happen at any type of real pace, not at any type of accelerated rate of innovation. The math just doesn’t work out,” Hora says. “You’d be much better off under the current 45Z rules to just sell it as ethanol.”

The Final IRS Guidance Matters

Forthcoming final rules from the IRS will set which of the two calculators will be used: GREET FD-CIC or USDA FD-CIC

Also, the IRS sets if the credits will be tracked with mass balance or book and claim method.

“Here’s the takeaway for farmers. You can continue to wait. But you’re money ahead to get your data organized,” he says.

The money is flowing—yet.

“There may be small amounts, pennies on the dollar to get things started and get farmers enrolled. This didn’t unlock the flood gates. But it locked it in. It’s here to stay. They are going to get these rules out. We’ve got to get some movement on the work ahead to get the data and the people ready,” Hora says.

You may want to pump the brakes on signing up for a new private carbon program, Hora says. Because all previous guidance has not allowed for signing up an acre for one program and selling a bushel under 45Z from the same land.

There will be ripple effects (and opportunities) for animal agriculture.

Hora says, “If you are in animal ag, talk to people in your supply chain. And talk about how to capitalize on this precedent setting program.”

Biofuels in Flux: What 3 Key Policy Decisions Will Shape the Future of the Industry?

Thu, 12 Jun 2025 13:36:42 GMT

The future of the biofuels industry in the U.S. is uncertain as decisions on three specific policy areas are in flux.

1. Renewable Volume Obligations

The Office of Management and Budget is currently holding stakeholder meetings on EPA’s proposed Renewable Volume Obligations (RVO), or mandated blending levels.

Biofuels group worked with the American Petroleum Institute to submit recommendations to EPA asking for RVO levels of 15 billion gallons for ethanol and 5.25 billion gallons for bio-mass based diesel.

There has been speculation and rumor that the draft EPA sent to the White House had proposed levels that fell below these amounts.

However, biofuels officials have refuted that conjecture and say EPA has assured them the levels may even exceed their recommendations.

2. Small Refinery Exemptions

At the same time, the EPA is also considering the backlog of Small Refinery Exemptions (SREs) carried over from the Biden administration, according to Troy Bredenkamp, senior vice president of government and public affairs for the Renewable Fuels Association.

Some of those date back several years and have expired.

“There are 169 of these pending small refinery exemptions that have been building up from court cases and remands,” he explains. “Our calculation is that’s about 8.5 billion gallons, so it’s a significant number.”

That’s why the industry has asked EPA to make the two policy decisions together so the SREs can be reallocated to other refiners through the blending levels set under the Renewable Fuels Standard (RFS).

“We’ve said whether you have expired RINs you’re issuing or you have active RINs for the current compliance years, make a three-year average and take that number and include it back into this round of RVOs,” Bredenkamp explains.

3. 45Z as Part of the Budget Reconciliation Bill

The future of 45Z also hangs in the balance awaiting Senate action, after the House included an extension of the biofuels tax credit to 2031 in their budget reconciliation bill.

Paul Winters, director of public affairs for Clean Fuel Alliance America, says that was good news for the industry.

“That essentially puts the credit for liquid fuels on par with the credits for other technologies and gives them the same length of time to access this tax credit,” he says.

The House bill also excludes the biofuels tax credit to entities outside North America, such as China.

“There are restrictions to feedstocks solely from Canada, Mexico and the United States. There are other provisions to restrict the involvement of foreign entities of concern,” Winters adds.

The question now is will the Senate adopt the House’s 45Z language in their bill?

Geoff Cooper, president and CEO of the Renewable Fuels Association, says so far there’s been good support in the Senate for the program.

“We do expect 45Z will be maintained, protected as the Senate takes up budget reconciliation, but there very well could be additional changes made to the 45Z program,” he states.

In fact, biofuels groups have asked the Senate to make 45Z more workable, according to Cooper.

“They should specify in the law that agricultural practices need to be part of that emissions rate scoring process. That’s the only way we’re going ensure farmers have the ability to participate in this opportunity,” he says.

And so farmers can share in the revenue stream.

Missouri Farmer Calls Ford Out for Abandoning Ethanol Flex Fuel in New F-150 Trucks

Mon, 31 Mar 2025 20:23:50 GMT

Missouri Corn Growers Association CEO Bradley Schad, who still helps out around the family farm in his spare time, is calling on Ford Motor Company to reconsider a recent decision he believes will cause long-term harm to U.S. farmers.

“They stopped selling new flex fuel vehicles, so now they don’t have a single new engine platform option for growers to purchase,” Schad says. “The F-Series truck is one of the most important vehicles that we have on the farm today. They’re trying to change that (series) to an electric fleet, and we don’t like that.”

Farm Journal reached out to Ford for comment via a contact form for media on its website. We will update this post if we hear back from anyone at Ford Motor Company.

According to Schad, Ford’s F-150 is not only the top-selling truck in the U.S., but also the top-selling used vehicle in the top five corn-producing states: Iowa, Illinois, Nebraska, Minnesota and Indiana. It is also No. 1 in a handful of ag-friendly states like Missouri, Kansas, Kentucky, Mississippi, the Dakotas and the Carolinas.

Model Year 2023 was the last iteration of the F-150 that Ford offered with the V8 5.0-liter Flex Fuel option. Schad, who is a longtime F-150 owner, says he’s not interested in criticizing Ford for the change. After all, recent regulations removed many of the manufacturer incentives that used to exist for flex fuel and E-85 vehicles.

Bradley Schad, Missouri Corn Growers Association

(Photo courtesy Missouri Corn Growers Association )

“We’re just trying to bring some awareness and work with Ford to change the legislation and regulations and help bring that (option) back,” Schad says. “We realize it’s not entirely their own fault necessarily, but work with us to pass some beneficial legislation that helps farmers and rural consumers purchase a more economical fuel and reduce our dependence on foreign oil.”

Schad says Ford is still supporting its higher-ethanol compatible engines in South America. Brazil, for example, has a minimum ethanol blend in its fuel of 27.5%.

The company’s chief truck-building rivals at GM still offer flex fuel as an engine option on new base models of the Chevy Silverado and the GMC Sierra. Ford, it would seem, is stepping away from the same farmers that helped catapult its trucks to the top of the auto industry, he argues.

(Photo courtesy Missouri Corn Growers Association)

“We need Ford to stand strong with farmers – the No. 1 customer base of F Series trucks in the nation. I don’t think there’s any business sector that buys more F Series trucks than the agriculture sector,” he says. “We need Ford to give us the option to use our own product and help build demand for corn-based ethanol.”

RELATED - Grassley: Farmers Can Feed And Fuel The World At The Same Time. It’s Not Either/Or

Schad is optimistic a long-awaited-but-yet-to-be-passed new Farm Bill will include some type of carve out supporting ethanol-based fuels. Republican Iowa Senator Chuck Grassley has also been advocating for year-round E-15 fuel availability for years. Grassley and Nebraska Senator Deb Fischer (R) reintroduced the Nationwide Consumer and Fuel Retailer Choice Act of 2025 in February. If passed, that bill would enable year-round, nationwide sales of ethanol fuel blends up to 15%.

“We need permanency and predictability with ethanol and biodiesel,” Grassley recently told AgriTalk host Chip Flory.

And while Schad admits he has heard all the critiques of ethanol-based fuels - subpar performance, increased engine problems, etc. - his experience is that higher ethanol fuels are clean burning, high performing and safe.

“There’s nothing more helpful to a farmer than having a strong truck with a strong fuel providing more horsepower and torque in these engines,” Schad says. “Octane is key, and we want to make sure to partner with everyone we can. Hopefully Ford is willing to help us pass some beneficial legislation that brings ethanol the ability to be produced and consumed across the nation.”

Today, U.S. Secretary of Agriculture Brooke Rollins announced USDA will release funding under the Higher Blends Infrastructure Incentive Program (HBIIP) for 543 projects totaling $537 million in 29 states. Established at USDA Rural Development during President Trump’s first term, HBIIP helps expand the production of domestic biofuels by helping fueling stations install the pumps, storage containers and other necessary infrastructure needed to offer biofuel options at the pump.

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Grassley: Farmers Can Feed And Fuel The World At The Same Time. It’s Not Either/Or

Mon, 24 Mar 2025 21:14:17 GMT

A still-agitated Sen. Chuck Grassley spoke to AgriTalk Host Chip Flory on Monday, detailing a list of frustrations from the town hall meeting Grassley hosted last Friday night at the Franklin County Courthouse in Hampton, Iowa.

The event marked the kickoff for Grassley’s 45th annual tour to each of Iowa’s 99 counties, done so he could hear directly from Iowans.

He heard from them all right.

About 150 Iowans worried and upset about funding cuts and mass firings of federal employees, led by Elon Musk and the Department of Government Efficiency, showed up and volleyed questions at the senior senator from Iowa.

In the overflow crowd were also a number of corn and soybean growers and county-based Republican party leaders Grassley and team had personally invited.

“A lot of them showed up. I’d have assumed I’d got a friendly question… And do you know that for a whole hour, not a single farmer or a single Republican leader asked me a single question,” the senator told Flory.

Instead, Grassley said he had to listen to “an hour of people complaining about President Donald Trump, Musk and Congress,” claiming the latter is not doing enough to provide a check on the president’s authority.

“Why wouldn’t they take an opportunity to ask Grassley something about international trade, or about the five-year farm bill or stuff like that?” Grassley asked Flory.

“I’ll ask you right now,” Flory responded. “Let’s talk about E15 and year-around availability. There’s a big push for it right now. Is that going to happen?”

“I think so, but I don’t know exactly when, because you’ve got to be bipartisan,” noted Grassley, who has long-championed year-round E15.

E15 Decision Requires Bipartisan Support

In mid-February, Grassley and Deb Fischer (R-Neb.), both members of the Senate Agriculture Committee, had reintroduced the Nationwide Consumer and Fuel Retailer Choice Act of 2025. The legislation is currently the only permanent, nationwide solution they said that will unleash the power of E15. The legislation would enable the year-round, nationwide sale of ethanol blends higher than 10 percent, helping to lower fuel prices and provide certainty in fuel markets for farmers and consumers.

“We’re hoping all those things get done, but we need permanency and predictability with ethanol and biodiesel,” Grassley told Flory. “And we need certainty, and this administration ought to give us that certainty.”

On his first day in office of his second term, President Trump directed the Environmental Protection Agency to explore the benefits of making E15 available year-round through his Executive Order Declaring a National Energy Emergency.

“We got plenty of leadership here in the Midwest, and all the president would have to do is say, ‘Well, why doesn’t Congress get off of its butt and get something passed to help and bring certainty to this very important industry, because we have the capability of feeding the world, and we have the capability of fueling the world,” Grassley said.

Trump Tariffs Are Concerning

Grassley has been very consistent over the years in his messages to American farmers and the public at large that he is not a proponent of using tariffs to negotiate trade decisions.

Flory asked Grassley what his take is on what’s currently happening on the trade front, and whether he anticipates any long-term gains resulting from implementing tariffs.

“I’m a free and fair trader. I want to negotiate tariffs down,” Grassley replied. “If the president’s plan works, I’m going to say, ‘Praise the Lord.’ And if it doesn’t work, I’m going to say, ‘I told you so.’ But I’m not telling him that yet.”

Grassley said while he’s been in the Senate, he has spent 40 years trying to eliminate or reduce tariffs. “If he (Trump) can do it in a better way, I’m going to honor him for doing it.”

Another trade-related issue Grassley brought up is the decision by the Trump administration to impose fees of up to $1.5 million on Chinese-built vessels entering U.S. ports as part of the administration’s efforts to revive the U.S. shipbuilding industry.

“I don’t know that the president understands what he’s doing,” Grassley said. “The president is just creating a problem every time a ship docks in the United States, putting up to a million-dollar-plus cost on it. It is going to make it much more difficult for us from a competitive standpoint. I don’t know if they really think this stuff through or not.”

Augusto Bassanini, president of the United Grain Corporation, said as much in a March 21 letter to U.S. Trade Representative Jamieson Greer. Bassanini, quoted in an online article by the South China Morning Post, said the “unintended consequences” of the proposed actions “are already beginning to surface, with global shipping markets reacting by reducing bookings to U.S. ports, increasing shipping rates, and modifying contractual terms.”

Are More Tough Economic Times Ahead?

Flory asked Grassley if the various issues are signaling a prolonged period of tough economic times for agriculture. “Should we be anticipating some payments to farmers like, you know, the market facilitation program payments under the first Trump administration?” Flory asked.

“Well, already we got the $29 for soybeans and $42 for corn going out now to farmers. That was the $10 billion appropriation of the previous bill, but that deals with the Biden economics,” Grassley replied.

“The only thing I’ve got to tell you is when (Trump’s) tariffs screwed up our sale of soybeans to China, then he put $28 billion out through the CCC (USDA’s Commodity Credit Corporation), which I think is too liberal of a delegation of authority to the president of the United States. But anyway, farmers want their money from the marketplace, not from the federal treasury,” Grassley added.

Flory’s final question to Grassley was regarding the timeline on tax cuts and budget reconciliation in the Senate.

Grassley said, “I hope today the chairman of the committee tells me he’s put together a bill. If he does that today, that will give us an opportunity to get something moving. Because until now, we’ve had 10 weeks of nothing but talk, talk, talk, going over the same thing week after week, and we got to move.”

The full discussion between Sen. Grassley and Flory on AgriTalk is available here.

Your next read: USDA Announces Key FPAC Appointments to Advance ‘America First’ Farm Agenda

Farmers Watch As Next-Generation Biofuels Chase Market Growth In 2025

Fri, 28 Feb 2025 16:55:12 GMT

Optimism remains high that growth in the biofuels industry will continue under the new Trump administration. In late February, EPA Administrator Lee Zeldin announced year-round E15 sales in eight Midwest states.

“Today’s decision underscores EPA’s commitment to consumer access to E15 while ensuring a smooth transition for fuel suppliers and refiners,” said EPA Administrator Zeldin in a press release .

In Congress, permanent E15 bills with broad bi-partisan support have been reintroduced in both chambers. A permanent E15 rule would increase ethanol demand by 5 to 7 billion gallons a year.

“The President has been, I believe, fairly unequivocal in stating his support for the importance of biofuels in the larger energy independence picture, and he also understands how important it is to our farmers and our ranchers who produce it,” said U.S. agriculture secretary Brooke Rollins during Top Producer Summit.

While the industry is watching the administration closely, green fuel mandates around the globe and those implemented during the Biden administration helped spark a flurry of investment in the renewable diesel and sustainable aviation fuel (SAF) markets.

Farmdoc Daily at the University of Illinois counted 23 renewable diesel plants in operation by the end of 2026 with a total capacity of 5.261 billion gallons.

“I do believe U.S. agriculture’s future is in green diesel and green fuels, including sustainable aviation fuel. That’s where our demand growth is going forward,” says Dan Basse, president and CEO of AgResource. “It takes policy and it takes someone at the helm with a budget to make sure that it happens.”

As those investments mature and as a compliment to renewable diesel, manufacturers are also looking to grow the SAF market. In 2021, the Biden Administration set a goal of 3 billion gallons of SAF by the year 2030. Farmdoc Daily estimates that in 2025, there will be six plants online with a capacity to produce 834 million gallons.

(U.S. Energy Information Administration)

“Just in the U.S. alone, there’s about 30 billion gallons of conventional jet fuel used every year,” says Jeff Davidman, the vice president of state and local government affairs at Delta Airlines. “The U.S. airline industry has made a commitment as an industry to replace 10% of their conventional jet fuel with SAF by 2030. That’s 3 billion gallons. In 2022, there were 25 million gallons made.”

This means the industry can scale quickly to meet those targets as long as the demand for these fuels continues. Delta isn’t alone - other airlines like Southwest touted SAF usage in 2024. The airline is reportedly cutting staff, and looking to pull back on sustainable targets.

However, investments in these “green” fuels continue to be announced. On Feb. 3, 2025, Gevo, Inc. announced the acquisition of Red Tail Energy’s ethanol production plant in Richardton, N.D., where it will focus on SAF.

“We’re primarily focused on sustainable aviation fuel and commercializing essentially a brand new industry,” says Kent Hartwig, director of state government affairs at Gevo. “We’ve been able to utilize ag products for renewable fuels for four decades now. As we see changes in fuel usage, that’s going to mean potential changes in ethanol production. How do we continue to sustain this industry? It’s through new markets. Having a new outlet, like sustainable aviation fuel, is an important market driver to keep farm profitability high.”

Even as a new administration takes over in Washington, Hartwig remains bullish despite the vocal calls to increase domestic oil production.

“The president has been crystal clear on his administration’s desire to see domestic energy dominance,” Hartwig says. “We’ve seen multiple executive orders that have laid out his plan for how we continue to be dominant in that area and in both he specifically calls out biofuels. So, while ‘drill, baby, drill’ is what the President has been saying, I also think he means ‘grow, baby, grow’.”

Ag secretary Rollins echoed those same sentiments during a fireside chat at Top Producer Summit in February.

“Remember during his first primary election, President Trump was the first major candidate to support biofuels, and I think that carried him through Iowa in many ways,” Rollins says. “He hasn’t forgotten that.”

“I think what you see in the policy space is the need to have these fuels available in the future,” says Cory-Ann Wind, director of state regulatory affairs for Clean Fuels Alliance America .

Her organization focuses on advancing biodiesel, renewable diesel and SAF policies.

“I think as long as the regulations or the policies evolve, you’re going to see more and more innovation in this industry,” Wind says.

Wind says regardless of what happens in Washington, state mandates and private industry goals are helping keep the momentum going.

“We’re looking at any mode of transportation that uses diesel,” Wind says. “We’re talking about trucks, ag equipment, construction equipment, long-haul semis and even marine.”

As global demand for these new-era biofuels continues to rise, it’s building a domestic market with the potential to improve prices on the farm.

“In 1979, the U.S. accounted for 62% of world agricultural trade and today that number’s down to 12%,” Basse says. “We now need to find another demand driver for U.S. agriculture.”

In 2024, the U.S. exported a record 1.9 million gallons of ethanol around the globe. CoBank put out a report that says those exports are the key to that industry’s growth. It says exports could top 2 billion gallons in 2025 and 2026.

“This is a real opportunity for the Midwest and Midwest farmer to lead in this space,” Davidman says. “This isn’t just U.S. or Delta demand. This is global demand.”

Sort Out The Biofuels Provisions Of The Inflation Reduction Act

Sun, 01 Dec 2024 14:00:00 GMT

Enacted in August 2022, the Inflation Reduction Act (IRA) restructured biofuels tax credits in three ways: extend the Biodiesel Blenders Tax Credit (40A), create a sustainable aviation fuel (SAF) tax credit (40B) and transition future biofuel tax credits to a carbon intensity (CI) (45Z).

“Both 40A and 40B become part of 45Z, transitioning blending to a production credit,” says Susan Stroud with No Bull Ag. “As the end of 2024 draws near, which is the end of 40B providing a $1 per gallon subsidy in the form of a blender tax credit for every gallon of biodiesel and renewable diesel blended into U.S. fuel supplies, oil share has somewhat been buoyed, as mandates are increasing at the same time we are disincentivizing fuel imports. This should spell more demand for soybean oil.”

As the hand off to 45Z nears, there’s a lack of clarity for the opportunity for farmers.

“USDA is trying to put guidance together to help the Department of Treasury with the 45Z rules,” explains Mitchell Hora, founder of Continuum Ag. “But climate smart commodities and low carbon feed stocks for biofuels are not the same thing.”

Whereas bundles were used with 40B and other previous programs are an all or nothing approach, Hora contends 45Z needs to use the Department of Energy’s GREET model.

“If bundles are used, it stifles farmer innovation — it waters down the impact,” he says. “We have to get this done right. The weight of this decision is massive. The ripple effect 45Z could have is tremendous.”

Legislation has been introduced to extend the biofuels tax credit through 2025 as we are still waiting on the Treasury to issue 45Z guidance.

Legislation Offered to Extend 45Z Tax Credits, Restrict to Domestic Feedstocks

Thu, 26 Sep 2024 19:48:35 GMT

There’s a new push in Congress to boost renewable fuels production in the U.S.

The 45Z tax credit is set to begin January 1, 2025 under the Inflation Reduction Act and run until the end of 2027. But this week, a bipartisan group of lawmakers has proposed extending the credit through 2034 and restricting the credit to domestic feed stocks.

The Farmer First Fuel Incentives Act was introduced in the Senate by Sens. Roger Marshall (R-Kan.) and Sherrod Brown (D-Ohio), and in the House by Reps. Tracey Mann (R-Kan.) and Marcy Kaptur (D-Ohio).

Donnell Rehagen, chief executive officer for the Clean Fuels Alliance America, says, “This tax credit 45Z will be effective January 1, 2025, but it’s really only good for a couple of years. Because it’s a critical element to our industry and the ability for industry to grow, getting that tax credit extended now creates that certainty our producers need in order to make that investment to continue to grow their production capacity.”

The tax credit ranges from $1.25 to $1.75 per gallon depending on the carbon intensity score of the feed stock used, but currently allows foreign feed stocks. The proposed bill would target the credit to only domestic feed stocks, which is drawing mixed response as some biofuels producers currently rely on imported feed stocks like used cooking oil from countries such as China.

Rehagen says their members support free trade, but more importantly, they need the Treasury Department to provide 45Z guidance as soon as possible so biofuels producers can acquire feedstocks for the program.

“We want to be able to export our finished fuels to countries that would use them and maybe pay production incentives for that. So, we don’t want to really be doing anything that could cause harm for our ability to access international markets. Some of that starts with trying to then disincentivize the importing of other products,” he explains. “We’re concerned it’s going to result in a pullback of some of the production that’s going on today as those producers have to wait for a little more certainty.”

Farmers also need this guidance as they make cropping plans for the 2025 growing season as feed stocks will need to be produced with climate smart agricultural practices to lower their carbon intensity score and qualify for the program.

The ABCs of 45Z: Take Time Now to Prepare for Low-Carbon Market Opportunities

Thu, 12 Sep 2024 15:29:37 GMT

By Heather Gieseke

The U.S. Treasury’s recent tax-credit guidance for the biofuels industry has sparked many questions about farmer impacts and ability to participate.

While there’s still a lot to figure out, it’s clear farmers who produce low-carbon fuels will benefit from greater opportunities ahead — including financial incentives and higher demand for crops with a smaller carbon footprint. To be able to take advantage of those opportunities when they arise, take time now to prepare.

What to Know Now
Each biofuels plant will manage this low-carbon market opportunity differently. There are a lot of factors in play for both facilities and farmers. But if you have implemented, or are considering, regenerative practices and you have the ability to deliver your crops to a biofuels plant, you should:

1. Document your practices.
Ideally, you’ll use data straight from your farm machinery software systems. If you haven’t done this before, start now. Even if not for 45Z, this certainly will benefit you in other ways in the future.

2. Reach out to the processing destinations local to you.
Do they have any programs already? If not, do they expect to have them in the future? What sort of data will be required to participate? How can you keep up with new information as it becomes available?

3. Hire a firm to help you calculate your current carbon intensity (CI) score.
If you have a fierce curiosity or desire to participate, consider expert help. This is likely just the beginning of a big future that will result from propelling your verified low CI score into additional revenue or demand opportunities for your farm.

New Terms In the World of Carbon Markets:

Carbon Intensity Score
A CI score is a measurement of greenhouse gas emissions divided by the amount of energy needed to produce something. A CI score is critical to determine the value of low-carbon products such as ethanol, soy biodiesel or sustainable aviation fuel (SAF). The lower the CI score, the fewer the emissions. Carbon neutral means zero emissions occurred during the product’s production. CI scores can also be negative. Crops with a lower CI are generally grown with practices such as reduced tillage, cover crops and nitrogen management strategies.

45Z
This provision in the Inflation Reduction Act provides a tax-credit incentive for producing low-emission biofuels. It only runs from 2025 to 2027 but could potentially be extended. This credit will likely be passed on as a premium to farmers for low-carbon grains and oilseeds to compensate for sustainable practices with verifiable data.

GREET
The Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) model standardizes the measurement of carbon emissions across transportation supply chains. We are waiting for an updated version of the GREET model to support 45Z CI calculations.

ARA Applauds Announcement on Ag's Role in Sustainable Biofuels

Tue, 30 Apr 2024 20:22:10 GMT

Today the Agricultural Retailers Association (ARA) President & CEO Daren Coppock released the following statement applauding the Biden Administration’s announcement updating the Greenhouse gases, Regulated Emissions, and Energy use in Technology (GREET) model and including regenerative agricultural practices in the sustainable aviation fuel emissions calculation:

“ARA is pleased to hear the announcement from the Biden Administration firmly establishing a role for agriculture in the future of sustainable fuels. Updates to the GREET model and the inclusion of agricultural crops and practices in the equation to qualify for 40(b) tax credits in 2023 and 2024 opens an important door for America’s farmers.

“As the Administration works to develop criteria for the 45(z) credits that will start in 2025, we look forward to more crops and more practices being included in the mix. Agriculture has much to offer, and we’re pleased to see those attributes recognized.

“Decisions like this don’t just happen,” Coppock continued. “They’re the product of months of hard work between the U.S. Department of Agriculture (USDA), the Department of Energy, White House staff and others. ARA offers our thanks and appreciation to Secretary Tom Vilsack and the team at USDA who invested time and a lot of work to show that agricultural crops can be big contributors to sustainable biofuels supply.”

USDA Says Trade Efforts Are Working to Build Markets Abroad

Tue, 21 Nov 2023 20:26:40 GMT

USDA announced last week it is introducing the Regional Agricultural Promotion Program (RAPP) to support continued growth of U.S. agricultural exports and to also introduce U.S. agricultural products to new markets.

The agency will invest $1.3 billion to support that market diversification effort within a public-private partnership with the agricultural sector, according to Alexis Taylor, USDA Trade and Foreign Agricultural Affairs Under Secretary.

Specifically, Taylor told AgriTalk Host, Chip Flory, that RAPP will provide assistance to eligible organizations that conduct market promotion activities, including ones to address existing or potential non-tariff barriers to trade.

Headway In India

Taylor told Flory the Biden administration has tallied numerous trade policy wins in 2023. Some of the key recent wins, she referenced, have been in India, which has been difficult to access with U.S. agricultural goods.

“They have what they would say are 800 million small-holder farmers. Imagine that – more than twice our population in the whole United States,” she said. “They increasingly are looking to develop an industrialized (society) and determine how they move away from subsistence farming to a better economic model. As they’re trying to wrap their arms around how to make that move, using tariffs has been one of the ways they’ve protected their farmers.”

Taylor said USDA has worked closely with India to reduce tariffs and has secured nine tariff reductions in 2023. To date, the agency reports India has dropped retaliatory tariffs on apples, chickpeas, lentils, almonds and walnuts. The Indian government also has reduced tariffs for turkey, duck, blueberries and cranberries.

Steady Progress Cited

Four additional export market successes Taylor and USDA cite as having achieved this year include:
1. Canada approving legislative recognition of U.S. biofuels, maintaining the largest and most dependable export market for U.S. ethanol and biodiesel;
2. Japan renegotiating beef safeguard levels under the U.S.-Japan Trade Agreement, reducing tariffs and generating growth opportunities for $150 million in beef exports;
3. Brazil agreeing not to change import certification requirements, ensuring continued exports of U.S. milk, beef, and seafood; and
4. Mexico granting market access to U.S. potatoes following more than 20 years of engagement.

Looking ahead, Taylor told Flory one of USDA’s key objectives will be increasing the export of U.S. agricultural foods and products to countries in Africa.

“By 2051, one in four people on the planet will live on the African continent, and we cannot ignore this any longer,” she said. “We’re really hopeful that the (RAPP) program will provide some resources for our food and ag sector to be able to invest in some of these areas of the world.”

Taylor’s conversation with Flory, which took place during the annual National Association of Farm Broadcasters Trade Talk program in Kansas City, is available to listen to here:

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Majority of U.S. Renewable Diesel is Consumed by California

Tue, 01 Aug 2023 13:22:05 GMT

Renewable diesel consumption in the U.S. hit 28 million barrels in 2021, according to the Energy Information Administration (EIA) . However, the only states to consume the renewable fuel were California and Oregon, with California burning up 99% of the consumption rate.

California’s staggering diesel uptake could be due to the state’s Low Carbon Fuel Standard (LCFS) .

In 2011, the state of California enacted the LCFS to encourage cleaner fuel consumption through rebates to paying customers. At the time of the legislation’s passage, California consumed 1 million barrels of renewable diesel. From 2011 to 2021, that volume increased from 1 million barrels to 28 million barrels.

While California is capable of producing roughly 3 million gallons of renewable diesel in-state, as was produced in 2021, it has a track record of importing—out-of-state and from Singapore, especially—to meet demand.

Renewable diesel is chemically equal to petroleum diesel and similar to biodiesel but is made, transported and used differently than biodiesel, according to EIA. Renewable diesel can be moved via pipelines and sold without blending with petroleum diesel, unlike biodiesel.

Few U.S. states, including North Dakota, Louisiana, California, Wyoming, Washington and Kansas, produce all U.S. renewable diesel, with Louisiana leading the production race at 46% of the total. These states each have contracts with California to push fuel to the state’s pumps.

These U.S. consumption and capacity rates are projected to continually increase, based on EIA’s estimates.

Keeping up with California’s demand, EIA forecasts U.S. renewable diesel capacity could more than double by 2025 , adding a boost to domestic production. The administration also anticipates the same trajectory for renewable diesel consumption.

EPA Details its Reason for Denying 26 Small Refinery Exemption Requests

Thu, 20 Jul 2023 16:53:35 GMT

EPA issued a notice detailing the reasons for rejecting 26 small refinery exemptions . These exemptions relate to the obligations these refineries have to blend biofuels with conventional fuel under the Renewable Fuel Standard (RFS). The exemption requires small refineries to prove that adhering to the standard would lead to ‘disproportionate economic hardship’.

The rationale for the July rejections follows the precedent set by similar decisions made in April and June 2022.

Related story: EPA Moves to Deny 26 Small Refinery Exemption Requests

In their investigation, the EPA found that all refineries faced equivalent costs when obtaining Renewable Identification Numbers (RINs)—which serve as proof of complying with the RFS—irrespective of whether they procure them by blending renewable fuels or buying them on the open market.

The market price for fuels rises to accommodate the RIN cost, much like it would due to higher crude prices. The end effect is that these obligated parties can recoup their expenditure on RINs through the market price of the fuel they produce.

This process is universal, and the EPA clarifies there is no disproportionate cost for any party, including small refineries, as the costs are recovered in the market price.

Related story: The Countdown is on for EPA to Revise WOTUS

Under the Clean Air Act, those affected by this decision have the right to request a judicial review with the US Court of Appeals for the District of Columbia Circuit within 60 days of the notice’s Federal Register publication. Several of the small refiners involved have declared their intention to lodge such petitions.

Renewable Fuel Standard Slammed by Biofuel Industry

Thu, 22 Jun 2023 17:06:09 GMT

On Wednesday, EPA released biofuel blending obligations under the Renewable Fuel Standard (RFS) for 2023, 2024 and 2025. This is the first rule following the Energy Independence and Security Act of 2007, which set blending volumes only through 2022.

According to the agency’s release , the final rule will reduce reliance on oil imports by 130,000 to 140,000 barrels of oil per day.

In December 2022, EPA, by court order, released renewable fuel blending proposals for 2023, 2024 and 2025. EPA received mixed reviews on its projections and heard public comment before it sought changes.

Here’s a breakdown of the changes from December 2022 to June 2023’s finale rule:

Cellulosic Biofuel

EPA says it looks to boost overall biofuel blending levels, but the final volumes include only 15 billion gallons of conventional biofuels in all three years, with 250-million-gallon supplemental amount for 2023.

For 2023, the agency did increase the cellulosic level from December’s proposal of 0.72 billion gallons to 0.84. However, the agency decreased blending obligations for the years following.

The 2024 blending obligations sit at 1.09 billion gallons (1.42 billion gallons proposed in December) and 1.38 billion gallons (2.13 billion gallons proposed).

These changes did not meet the approval of some biofuel industry leaders, including Growth Energy CEO Emily Skor.

“EPA inexplicably failed to extend that recognition to conventional biofuels. The bioethanol industry has more than adequate supply to meet the higher volumes that were originally proposed in December 2022,” Skor said in a press release . “We should be expanding market opportunities for higher blends like E15, not leaving carbon reductions on the table.”

Biomass-Based Diesel (BBD)

In 2023, EPA will require use of 2.82 billion gallons of BBD, generally made from soybean and canola oil — just a 2.2% increase over the 2.76 billion gallons mandated last year, but no increase from the level proposed in December.

For 2024, the agency will increase the level to 3.04 billion gallons (2.89 billion gallons proposed in December) and 3.35 billion gallons in 2025 (2.95 billion gallons proposed).

Kurt Kovarik, president of federal affairs at Clean Fuels Alliance America, mirrored Skor’s comments. He says EPA’s final rule on diesel is a shame, given the data that showcases the fuel’s upward trajectory. He slammed the agency for its undercut numbers and delayed rulings.

“EPA ignores the hundreds of millions of gallons of biodiesel, renewable diesel and sustainable aviation fuel generated in the first half of 2023,” Kovarik continues. “In past years when EPA set RFS volumes after the statutory deadline and after the compliance year is nearly half over, the agency properly accounted for available gallons and RINs.”

Advanced Biofuels

This year, advanced biofuels will account for 5.94 billion gallons (5.82 billion proposed). That level increases to 6.54 billion gallons in 2024 (5.82 billion proposed) and 7.33 billion gallons (7.43 billion proposed) in 2025.

Electric Vehicles are Off the Table

In December 2022, EPA added renewable electricity to the RFS proposal for the first time. The agency said the plans were aimed at providing “clarity on how electricity would be incorporated into the RFS.

EPA chose to remove electricity from the RFS lineup, at least for now.

Geoff Cooper, Renewable Fuels Association president and CEO, says he and his members feel the agency made the right move to put a hold on electricity in the RFS until they “get it right.”

New Fuel Act Could Pump More Biofuels into the Jet Market

Fri, 16 Jun 2023 13:27:25 GMT

The White House set a goal of producing 3 billion gallons of sustainable aviation fuel (SAF) by 2030 to help achieve climate goals. However, outdated climate data is keeping producers from reaching the finish line, according to various senators.

To address the issue, congressmembers introduced the Sustainable Aviation Fuels Accuracy Act of 2023 on Tuesday. If passed, the bill would require the Department of Energy (DOE) to use the GREET model — a greenhouse gas measuring method considered to be most accurate — to collect data on crop, land and carbon practices that reduce greenhouse gases, which then go on to reduce jet fuel emissions.

“Emissions modeling needs to reflect the latest science and technology. The GREET model will more accurately capture the environmental benefits of biofuels, including for sustainable aviation fuels,” says Sen. Deb Fischer (R-Neb.).

If GREET is considered the most accurate, then why isn’t it the standard? Chris Bliley, Growth Energy’s senior vice president of regulatory affairs, says it comes down to conflicting interests.

“Because aviation is a global marketplace that includes international flights, a lot of people think all countries should be using the international SAF model. But for the U.S., we use tax incentives, so it only makes sense that we would use our own model developed by the DOE. And the DOE should be giving us the gold standard, which is GREET,” Bliley says.

Sen. Joni Ernst, echoed Bliley in saying the international model isn’t a good fit for the U.S. She says it’s a matter of energy dependence.

“Our bill ensures America’s domestic energy production is driven by the U.S. GREET model rather than rely on the current international model dictated by foreign countries like China and Russia. Not only is this model better for our national security, but it also provides an opportunity to support our hard-working American farmers,” Ernst says.

Big Oil is Teaming Up With Big Ag, And it Could Turn Cover Crops Into the New Cash Crop for Farmers

Fri, 24 Mar 2023 15:10:02 GMT

Renewable diesel is revving up interest from both agriculture and the oil industry, and now oil and agriculture companies are teaming up to find additional crop sources to fuel the growing demand. Cover crops could be an additional source, which would also give farmers another revenue stream.

“There seems to be no holding back this investment in renewable diesel and sustainable aviation fuel,” says Peter Meyer, grain and oilseeds economist with S&P Global Commodity Insights .

Meyer has also been watching the renewable fuels growth potential closely for the past two years.

“We had a conversation with a major oil company this week, and they asked me why my soybean oil demand for renewable diesel was flat from 2024 to 2025,” says Meyer. “And I said, ‘because you run out of crop, and you run out of crush capacity.’”

S&P Global Commodity Insights forecasts the demand for soybean oil to increase 25% from now until 2024, with that forecast to stay flat into 2025. That’s because S&P is forecasting crush capacity to grow by 25% during that same time frame.

First Renewable Fuels Plant Now Coming Online in California

The awaited increase in demand has been talked about for a couple years, and the first major U.S. plant to produce renewable diesel, is set to come online yet this month. “There’s an enormous plant out in Martinez, Calif., which is a Marathon plan that is going to be running in the first quarter and then running full bore by the fourth quarter,” says Meyer.

In 2021, Marathon announced plans to convert its Martinez, Calif. refinery facility to a renewable fuels facility. And as the first of more than 20 announcements since, it’s the one the entire industry is watching, as it marks the start of a new era for renewable fuels. The partnership for this plant is with Neste, an oil refining and marketing company, produces, refines and markets oil products.

“That’s a joint venture between Marathon and Neste,” says Meyer. “We’re tracking cooking oil imports into the U.S. very closely. They have increased quite a bit that would be the preferred feedstock for that plant. Whether or not they have enough, that’s the question.”

As more crush facilities come online, the California plant will produce renewable diesel from mainly used cooking oil for now.

“China is the world’s largest exporter of used cooking oil. TheUnited States used cooking oil was basically exported into Singapore converted into renewable diesel and brought back into California. Now with the Martinez, Calif., plant coming online we think to use cooking oil stays in the U.S. will grow, and also the us becomes a net importer,” explains Meyer.

Turning Other Cover Crops Into Cash Crops for Farmers

S&P Global Commodity Insights shows soybean oil is still be the main source for other renewable diesel plants coming online, but with not enough soybean acres to meet that demand, companies are looking at other crops, as well.

From camelina and canola to pennycress, agricultural companies are teaming up with oil companies to find additional sources to make renewable diesel.

Last week, Corteva, Bunge and Chevron announced a commercial collaboration to introduce a proprietary winter canola hybrid to produce plant-based oil with a lower carbon profile. The goal? Increase availability of vegetable oil to fuel the domestic renewable fuels market.

“This week’s announcement with Corteva really shows that Chevron and Bunge are in it to win it,” says Meyer. “It also shows despite the fact that we’re going to have additional soybean crush capacity coming online here in two years, they don’t want to rely on that.”

Corteva’s announcement comes on the heels of a joint venture between Shell Oil and S&W Seeds to grow camelina .

“It’s called Vision Biofuels,” says Brent Johnson, vice president of sales and marketing for Americas with S&W Seeds. “And it’s owned by both Shell and S&W Seeds. So, we formed a separate joint venture. They’re going to be doing breeding and research, and actually, it’s at one of our former facilities in Nampa, Idaho.”

Johnson says the goal is to give growers another possible seed source, and one that doesn’t take away from their crop rotation today.

“I think a key point to the camelina is we’re not going to replace any of our food production acres, it’s an additive,” he says.

While the main idea is to use it as a cover crop, it could also be planted as a double crop in early spring.

“It’s a very short season crop, just 90 days to harvest,” says Johnson.

CoverCress Could Grow to 20 Million Acres

Another crop creating opportunity is field pennycress, a crop developed by CoverCress through breeding and gene editing. Pennycress is a common winter weed, but the startup company that began in 2013, turned it into a cover crop that can be crushed, with the oil turning into another source for renewable fuels.

In 2022, CoverCress raised $26 million and partnered with Bunge and Chevron. Then, later that year, Bayer acquired the majority share of CoverCress.

“They planted 10,000 acres of pennycress this year, they’re looking for 20 million acres, yes 20 million, is their target within the next five years,” says Meyer.

True Test for Renewable Diesel

Meyer says the trust test to which investments will gain ground could come later this year.

“2023 is going to be the year where we find out who the contenders are and who the pretenders are,” says Meyer.

As more joint ventures are announced, it’s opening the door for a new era of opportunity, as well as unique partnerships. Traditionally, oil companies were at odds with agriculture, especially when it came to ethanol. But renewable diesel is the new common ground for oil and agriculture.

“Who would have ever thought that oil companies would have been in the seed business? This is big oil joins, big ag,” Meyer says.

The new partnerships are ones S&P Global commodity Insights sees as a tremendous opportunity for farmers to see a second cash crop. And it’s not just one crop -- but a multitude of crops that farmers could cash in on in the years ahead.

“This is the opportunity, not necessarily for you to have to change your change your rotation or whatever. But the fact of the matter is, this is an opportunity for you to make more money on your land, if you pay attention to what’s going on around you,” says Meyer.

Vilsack Focuses on Farm Bill Possibilities with National Sustainable Ag Coalition

Tue, 31 Jan 2023 20:27:48 GMT

USDA Secretary Tom Vilsack on Monday addressed the winter meeting of the NASC, telling members that USDA’s focus has been on developing sustainable food systems through areas like funding an organic transition program and helping farmers turn waste into biofuels.

Vilsack said USDA believes there are more options for farmers other than “get big or get out. There’s got to be a system in which the many and most have a fair shot.”

Read more: Ag Groups File Lawsuit to Challenge EPA’s “Vague” New WOTUS Definition

Vilsack noted the administration’s focus on a “true local regional food system” that he said would be more resilient and less susceptible to foreign conflicts, international trade and production in other countries. He specifically urged state leaders to get more involved.

“Why can’t they invest in value-added opportunities? What’s preventing them from encouraging ecosystem markets in their state? Why aren’t they investing in bio-based product manufacturing and creating opportunities for agricultural waste? How about using some of that money to support local and regional food systems? Maybe they can help with input costs,” Vilsack said.

Read more: Policy and Payments: What Producers Can Expect in 2023

He urged the NSAC members to focus their efforts on educating lawmakers and urged them to push lawmakers to keep expanded funding in place.

“There’s historic money invested in this and there are some people who want to take it away,” he stressed.

DOE Cuts $118 Million Check to Biofuels Projects

Thu, 26 Jan 2023 22:36:31 GMT

U.S. Department of Energy (DOE) on Thursday unveiled $118 million in funding to 17 sustainable biofuels projects taking place at universities and private companies.

According to DOE’s press release , the selected projects—with funding ranging from $500,000 to $80 million—will contribute to the department’s goal for cost-competitive biofuels and at least a 70% reduction in greenhouse gas emissions by 2030.

Read more: Are Landlocked Soybean Crush Facilities Destined to Survive?

“DOE investments are helping to build out a domestic bioenergy supply chain that increases America’s energy independence, creates jobs, and accelerates the adoption of cleaner fuels for our transportation needs,” said U.S. Secretary of Energy Jennifer M. Granholm.

Some of the projects include:

• Lincolnway Energy LLC , Nevada, IA: $453,000 for reduced carbon intensity ethanol through biogas from stillage and other feedstocks.

• Research Triangle Institute , Research Triangle Park, NC: $2,000,000 to turn corn stover into sustainable aviation fuel.

• AVAPCO, LLC , Thomaston, GA: $80,000,000 for Phase 2 of a biorefinery to achieve net zero aviation emissions through biofuel.

Industry responds

Emily Skor, Growth Energy CEO, applauded DOE’s biofuel effort.

“The funds awarded today by the DOE will undoubtedly accelerate the innovations taking place at U.S. ethanol plants, opening new opportunities for low-cost, low-carbon energy,” she said.

Read more: EPA Wants to Hear Your Thoughts on the Proposed RFS Levels

Skor says Growth Energy is most “excited” for Marquis, Inc.’s project , now harnessed with $8 million additional funds, which seeks to combines CO2 with low-carbon hydrogen to create a new production stream of extra-low-carbon ethanol.

According to Marquis, Inc. , the resulting extra-low-carbon, produced in Illinois, will increase ethanol’s yield by 50% without additional land or fertilizers. The company also says the product will cut emissions by 70% or more, compared to petroleum-based alternatives.

Renewable Fuel's Big Week: EPA's RFS Proposal And Year-Round E15 Legislation

Thu, 01 Dec 2022 20:01:51 GMT

EPA, by court order, released renewable fuel blending proposals on Thursday for 2023, 2024 and 2025, as well as information about eRINS for electric vehicles.

The proposed volume requirements come as the agency faced scrutiny on Wednesday and early Thursday for its failure to meet their court-ordered proposal deadline of Nov. 30 in order to finalize by Jun. 14, 2023.

Proposed Volume Targets (billion RINs)

	2023	2024	2025
Cellulosic biofuel	0.72	1.42	2.13
Biomass-based diesel*	2.82	2.89	2.95
Advanced biofuel	5.82	6.62	7.43
Renewable fuel	20.82	21.87	22.68
Supplemental standard	0.25	n/a	n/a

*biomass-based diesel in gallons

“With this proposal, EPA seeks to provide consumers with more options while diversifying our nation’s energy mix,” said Michael Regan, EPA Administrator. “EPA is also focused on strengthening the economics of our critical energy infrastructure, needed to maintain and boost our energy security.”

Regan says his team is “eager” to continue the conversation around the RFS and will do so through public comment.

In replying to EPA’s comment request, the public will offer:

1. How the EPA can better balance the proposed volumes to work for renewable fuel consumers, growers and producers, refiners and workers that operate refining facilities.
2. Ways in which the EPA can “best” support sustainable aviation fuels (SAF) and clean hydrogen.
3. Methods for the EPA to work with domestic oil refining assets and merchant refineries.
4. How to account for incentives offered in the Inflation Reduction Act.
5. Thoughts on qualifying renewable electricity in electric vehicles into the RFS program.

New Regulations in the Works

The electric vehicle proposal in question five is tied to EPA’s latest regulation concept that would “increase U.S. energy security,” according to EPA.

In allowing renewable energy made from renewable biomass into the RFS, EPA says U.S. oil imports would be reduced by 160,000 to 180,000 barrels of oil per year from 2023 to 2025—the length of the proposed rule. The agency says this translates to $200-$223 million in savings each year.

Need for Public Comment

Seth Meyer, USDA chief economist, says these numbers show why the public comment period is “crucial” to the RFS, especially for the ag industry.

“I think for the U.S. biofuels sector, when considering what motor gasoline consumption might be over the next decade, we’re not talking about a growth market by most accounts. We’re talking about a flat to maybe declining market,” says Meyer. “In asking these questions, EPA wants to know how producers can find and contribute to other markets and fuel sectors, like SAF.”

According to Meyer, there tends to be a “big” response to these types of public comment periods. He says agencies often bring in “additional resources” to examine each comment in detail, and get the information tallied in the system.

In Other News

EPA’s RFS news and request for public comment comes as a group of Senators on Wednesday announced bipartisan legislation, the Consumer and Fuel Retailer Choice Act of 2022, that would make E15 blends available year-round.

“We’ve been able to bring critical oil/gas, biofuel, ag, and transportation stakeholders to the table around a common-sense solution,” said Sen. Deb Fischer (R-NE). “With this strong coalition of support, it’s time Congress act to make year-round E15 a reality.”

The U.S. is no stranger to year-round E15, as the Biden administration allowed American’s the option this summer to ease soaring pump prices.

Sen. Chuck Grassley (R-IA) joined AgriTalk Host Chip Flory on Wednesday to break down what sets this bill apart from past ethanol proposals.

“The shocking thing about this bill is that the oil industry supports it because it gives them an opportunity to sell more of their product,” Grassley says.

Grassley believes oil companies also hopped on board with this legislation as:
1. “Several Midwestern governors” having made it clear that E15 will be year-round in their states.
2. Year-round blending will extend the lifetime of liquid fuel availability.

Certainty was Grassley’s biggest concern for the biofuels industry this week. He says he worked to provide that by supporting this E15 legislation, as well as pressuring Regan to “fulfill his promise” for biofuels in the RFS announcement.

More on RFS:

EPA Sends RFS Plans to Next Phase as Nov. Deadline Approaches
EPA’s Small Refinery Exemption Data Under Fire by U.S. Accountability Office

EPA's Small Refinery Exemption Data Under Fire by U.S. Accountability Office

Thu, 03 Nov 2022 23:41:48 GMT

Each year, EPA sets a renewable fuel standard (RFS) , which requires gas and diesel be blended with a minimum volume of renewable fuels. Small fuel refiners can petition the EPA to be exempt from fulfilling the RFS obligations due to “disproportionate economic hardship,” according to EPA.

In a study released on Thursday, the U.S. Government Accountability Office (GAO) found small oil refineries pay more than larger competitors to fulfill their blending obligations.

This means GAO finds small refineries do experience the economic hardship necessary to meet the exemption, and that EPA’s continued decision to deny all exemption petitions is inaccurate.

According to Jim Wiesemeyer, Pro Farmer policy analyst, GAOs new findings could “intensify” requests to ease blending requirements in order to lower fuel prices.

GAO to Overhaul the EPA’s Methods

With the new data in tow, GAO also offered seven exemption denial recommendations, including EPA:
1. Reassess its conclusion that all small refineries recover the cost to meet each years’ blending obligations.
2. Develop new policies and procedures for making exemption decisions.
3. Construct a new approach to better meet its annual March deadline.

“EPA officials have not specified what information would be useful for them to determine whether small refineries experience disproportionate economic hardship from the RFS, wrote GAO in the study. “Instead, EPA has requested whatever information refineries think would show hardship, while requiring information that the agency no longer intends to use.”

The agency partially agreed with GAO on the three listed recommendations but disagreed with all others, including that the agency offer small refiners a chance to recover their past compliance costs.

However, the GAO said EPA made it clear “it does not intend to revisit its 2022 exemption decision.”

Hold the Gavel

GAO’s study comes as Growth Energy, the Renewable Fuels Association, the American Coalition for Ethanol and National Farmers Union filed a motion in the D.C. Circuit Court of Appeals to intervene in a lawsuit filed against the EPA.

The lawsuit claims EPA’s 2022 decision to deny 69 petitions from refineries seeking small refinery exemptions (SREs) from the agency’s biofuel blending program was unjustified.

The groups intervened in the suit in favor of EPA, saying the agency’s decision will keep certain refiners from turning the clock back to “an era of gross mismanagements and abuse” of SREs.

“For far too long, many refiners got away with dodging their obligations to blend lower-carbon biofuel into the fuel supply,” the groups said in a press release . “EPA’s denial of these SRE petitions provides a clean slate to get the RFS back on track. Holding refiners accountable will ensure lower prices and cleaner options at the pump for American families.”

In 2021, the Biden administration rewrote its method for determining whether small refiners qualify for exemptions—an action that followed President Trump’s approval of 88 small refinery petitions in 2016 to 2020.

According to latest estimates from the biofuels industry, the Trump administration’s 88 petition approval measure cost the biofuel industry billion of gallons in lost demand.

More on biofuels:

EPA Proposes New Rules on RFS, Finalizes Biofuel Blending Requirements
John Phipps: It’s Now Less About the Supply of Oil, And More About Refining Capacity in the U.S.
EPA Faces Lawsuit for Ethanol’s Impacts on Endangered Species

$100 Million Grant to Renewable Fuels Will Bring ‘New Wave of Growth’

Wed, 05 Oct 2022 18:44:12 GMT

Fuel markets began a downward trajectory in late June, with the AAA reporting the U.S.’s average price for regular gas on Tuesday is $3.83, down 49¢ from July.

While fuel prices moved at a rapid pace in 2022, initiatives to alleviate pump prices haven’t moved as fast. One program, however, was finally given the spotlight this week.

The Federal Register published a document on Tuesday that opened the application window for roughly $100 million in grants to “expand” the sale and use of renewable fuels within the USDA’s Higher Blends Infrastructure Incentive Program (HBIIP).

Renewable fuel distribution facilities can now apply for the HBIIP cost-share grants that will aid in converting to higher-blends of:
1. Ethanol—greater than 10%
2. Biodiesel—greater than 5%

Tom Vilsack, USDA secretary, says the funding will strengthen an “important” industry tool to minimize our reliance on other countries.

“Biofuels are homegrown fuels,” Vilsack said. “Expanding the availability of higher-blend fuels is a win for American farmers, the rural economy and hardworking Americans who pay the price here at home when we depend on volatile fuel sources overseas.”

Will the USDA Funds Help?

While HBIIP has a large price tag, will it have an impact? Emily Skor, Growth Energy CEO, says she’s seen fuel grants benefit the renewable industry firsthand.

“We have heard countless success stories from our retail partners about how HBIIP grants have helped them expand options at the pump and bring cleaner, more affordable options to drivers across the nation,” she says. “Today’s announcement reaffirms USDA’s commitment to ensuring a new wave of growth for higher biofuel blends…”

These funds—separate from the $500 million recently enacted through the Inflation Reduction Act —will be used for facility installation, retrofitting and pump upgrades, along with new equipment and buildings.

HBIIP applications will be accepted now through Nov. 21.

More on renewable fuels:
Will the IRA’s Biofuel Provisions Ease Pump Prices? Sen. Ernst Isn’t Convinced
What’s Ag’s Stake in the Senate-Passed Inflation Reduction Act?
New Legislation Could Put E30 on a Pump Near You

What's Ag's Stake in the Senate-Passed Inflation Reduction Act?

Wed, 05 Oct 2022 18:44:12 GMT

It was a busy weekend on The Hill for the Senate as it voted on Sunday to pass the $740-billion Inflation Reduction Act (IRA).

Proposed by Senate Democrats, the bill passed by a 51 to 50 vote after Democrats “successfully” blocked most of the 41 proposed amendments set forth by Republicans, according to Jim Wiesemeyer, ProFarmer policy analyst.

Politics aside, what does this reconciliation bill mean for ag?

Biofuels Big Day

$369 billion will be dedicated to energy programs, which includes biofuels. Wiesemeyer says this funding was made possible by one man in particular.

Sen. Joe Manchin (D-W.Va.) upended Democrat-led reconciliation bills in the past due to their strict climate focus. Manchin turned his reconciliation bill “nay” to “yea” this round only after securing numerous biofuel provisions, including:
1. Funding for blender pump and biofuel infrastructure
2. A collective $3 billion for renewable energy projects in rural areas, including USDA’s Rural Energy for America Program
3. Rural electric cooperative direct pays that allow for renewable energy tax credits
4. Extension on the $1-a-gallon tax credit for biomass-based diesel through 2024

Regarding the diesel tax credit, Wiesemeyer says once the 2024 time is up, the IRA proposes the clean fuels tax credit would vary according to the biofuel’s carbon rating.

“A temporary $1.25 per gallon tax credit would be created for sustainable aviation fuel (SAF) to serve as a bridge to the implementation of the clean fuels credit in 2025,” he wrote. “The new clean fuels credit would be in effect through 2027.”

However, the Congressional Budget Office (CBO) doesn’t feel SAF provision will do much, according to Wiesemeyer.

“The CBO scored that tax provision for the SAF at only $49 million, and it lasts for only two years exclusively for SAF,” Wiesemeyer told AgriTalk Host Chip Flory. “CBO clearly doesn’t think a lot of this provision.”

Farm Debt

According to USDA’s 2022 Farm Sector Income Forecast released in February, the U.S. farm sector’s debt will increase 3% this year to nearly $13 billion.

The IRA looks to combat this issue by delivering a $5.3 billion farm debt relief package. The provision will offer:
• $3.1 billion to “distressed” borrowers who hold direct or guaranteed farm loans
• $2.2 billion in payments to farmers who experienced discrimination in USDA loan programs

Wiesemeyer says farm debt payments will cap at $500,000 per producer, with the price tag paid by reinstating a debt relief program that was previously enabled through the American Rescue Plan in 2021 and later stopped in U.S. courts.

“We won’t know a lot of the answers on this until USDA comes up with a way to implement it,” Wiesemeyer told Flory. “They have to file their proposed regulations in the Federal Register, likely for public comments, so we’ve got a way to go on this.”

Conservation

Climate and conservation are threaded together in the IRA to deliver $18 billion in four conservation programs:

• Environmental Quality Incentives Program - $8.45 billion
• Regional Conservation Partnership Program - $4.95 billion
• Conservation Stewardship Program - $3.25 billion
• Agricultural Conservation Easement Program - $1.4 billion

With the USDA’s implementation of these programs, Wiesemeyer is told the Agency will “mitigate or address” ag’s climate contributions.

John Block, senior policy advisor at Olsson, Frank, and Weeda law firm says USDA will also be tasked with measuring the impact ag has on total U.S. greenhouse gas emissions while advocating for the use of green farming practices, like cover crops and carbon sequestration , among others.

Outside of program funding, another provision added $4 billion to fight drought in the West. Sen. Kyrsten Sinema (D-AZ) says she pushed this last-minute legislation to address an ongoing issue in her area.

The $4 billion I secured in the Inflation Reduction Act for Western drought relief and conservation is sorely need in Arizona and other states. Thank you, @nature_arizona for your support and for being a trusted partner as we work to secure Arizona's water future. pic.twitter.com/iUxq0P4d2n
— Kyrsten Sinema (@SenatorSinema) August 7, 2022

Cutting Farm Costs

IRA’s passage might cut on-farm energy costs through efficiency upgrades, according to Wiesemeyer.

“Another provision extends a program that allows households that are installing solar or battery storage systems to deduct 30% of the cost of those projects from their taxes,” he says.

The same 30% tax reduction applies to heat pump and insulation improvements outlined in a separate provision.

If the IRA is signed into law, the Rhodium Group estimates U.S. households would save $170 to $200 per year due to energy costs dropping 5% to 7%.

How Will the Inflation Reduction Act be Funded?

The tax portion of the IRA is estimated to deliver roughly $739 billion to the government, which covers the $740 billion IRA price tag. Block says the funds will be sourced by imposing a 15% corporate minimum tax.

Block isn’t excited at the idea of spending more money, as he worries it will “pour fuel on the inflation fire” that the government is trying to put out.

“I’m not against taxing some of the biggest corporations that seem to always find a loophole to avoid taxes,” he wrote. “A $739 billion bill is a lot of money. It will be very difficult to get it passed.”

The House is gearing up to return from their summer recess on Friday to vote on Senate-passed the IRA. Wiesemeyer anticipates the House will pass the bill.

Understanding all pieces of the puzzle:
9 Farm Financial Statistics to Know for 2022
Biden’s Environmental Plans Upended by the Senate’s Latest Vote
What Changed Senator Manchin’s Mind About $740B Reconciliation Bill?

This Researcher Looks to Uncover Renewable Diesel Source in Unique Place

Wed, 28 Sep 2022 19:13:13 GMT

Step into greenhouses at the University of Nebraska-Lincoln (ULN), and you’ll discover research taking root to answer a growing global need for more oil–from jet fuel, to heavy equipment, as well as food products and industrial needs.

The demand for oil continues to ramp up as biomass based diesel, which includes renewable diesel , is fueled by the focus on finding cleaner burning fuels. Seeing that need is exactly what one UNL researcher made the focus of his latest research .

“Our research is focused on making more oil and better oil,” says Edgar Cahoon, professor of biochemistry and also director of the center for plant science innovation at UNL. “We’re trying to address the need for the for more oil, there’s a world shortage of vegetable oils, but also tried to make higher value oils for producers.”

Department of Energy Shows Interest in UNL Research

The need is so great, Cahoon’s research just received a $12.8 million grant from the Department of Energy over the next five years.

Cahoon says he’s part of a group of a researching team, led by UNL, who is using biotechnology tools to improve crops, unlocking the full potential of two oilseeds, but then those findings will be applied to crops not known for producing oil.

“We’re doing that both in traditional oilseed crops like soybean, but also trying to make more oil and vegetative or biomass crops like sorghum,” he adds.

Uncovering What Genes Produce the Oil

So, exactly what are the researchers trying to uncover? Cahoon says his research is out to find what makes the oilseeds oil-producing machines.

“This idea that we’re going to be engineering, vegetable oil production and the leaves of stems, leaves and stems of sorghum is kind of a new idea. And it’s really both a scientific challenge and at some point, will be a bio processing challenge,” says Cahoon.

Through biotechnology, Cahoon and the team are working to introduce genes that increase the genetic diversity of the plant, and ultimately, allow the crops to produce higher levels of oil.

“We want to add more value to the these biomass crops like sorghum by engineering pathways to make oils, not in the seeds, but in the the leaves and the stem of the crop to add more value. In the bio processing of sorghum, not only do we get the biomass, but we can get the vegetable oil,” Cahoon explains.

It’s not just traditional oil seed crops such as soybeans being explored here in this greenhouse, but also crops that don’t traditionally aren’t crushed for oil.

“We’re working with the biomass crops, they don’t traditionally make vegetable oils, so they they’re used for things like biofuels,” Cahoon says.

The Push for More Oil to Fuel Demand

The research is being driven by a growing hunger worldwide for more oils, and one that doesn’t seem to be on pace to slow down anytime soon.

The growing need for oil that can be turned into renewable diesel and sustainable aviation fuel is an industry trend that started making waves just over a year ago. For more than a year, S&P Global Commodity Insights has been digging into the need for more oil. Their current forecast shows how that demand is expected to continue to grow, and considering a large portion of these products are already used for food and industrial purposes, analysts say more supply will be needed to meet that demand.

Some of that supply could come from new feedstock supplies like camelina, another crop UNL is currently researching.

“We also work on non-food oil crops,” says Cahoon. “One of them is camelina, we think that’s an alternative especially for maybe more marginal dry land applications. And as a cover crop for rotations with crops like soybean.”

Cahoon says vegetable oils are the most energy dense molecules produced on the planet, which is why they are an attractive option for the quest to find more oil to supply renewable fuels and bioproducts.

“They have the functionality that you need for the food applications, but they also have a lot of energy stored within the molecules that can be broken apart and used for diesel applications for jet fuel applications,” he adds.

UNL’s Focus on Biotechnology

Cahoon says the research is taking root at UNL for one major reason: the University’s continued investment and focus on biotechnology, which is a vital tool in meeting the exploding demand.

“We’re really fortunate at the University of Nebraska-Lincoln because we have some of the best facilities in the public sector for crop biotechnology,” he says.

The living laboratory is rooted in understanding farmers’ needs to create value-added opportunities, even beyond traditional uses of food and biofuels. Cahoon says the research at UNL facilities today are aimed at not only understanding the enzymes that could allow different crops to generate oil, to producing soybean plants that even feature fish oils, it’s all about meeting a growing demand.

Fuel the Crush: Renewable Diesel Pumps Up Soybean Demand

Fri, 12 Nov 2021 14:24:48 GMT

Big change is afoot. Those soybeans growing in your fields have traditionally been valued by the meal they produce and animals they feed. Soon their oil content could pad your pocketbook.

Public policy to reduce carbon emissions is fueling demand for bio-based fuels. Low Carbon Fuel Standards are in place in California and Oregon, and several other states are considering them. These rules call for conventional petroleum fuels, such as gasoline and diesel, to be replaced with more carbon-friendly fuels.

“The administration is committed to making this happen, and so I think there is a much larger appetite to get this industry off the ground now than there even was six months or a year ago,” says Alexa Combelic, director of government affairs for the American Soybean Association.

Enter renewable diesel. While it is a cousin of biodiesel, the two fuels are not the same. Renewable diesel, which is produced by processing fats and vegetable oils, is chemically the same as petroleum diesel and has nearly identical performance characteristics. Plus, it is 100% fuel, removing the need for blending it with diesel.

“Based on projections, total supplies of edible fats and oils in the U.S. will need to double over the next decade to meet the feedstock needs of the renewable diesel industry,” says Stephen Nicholson, Rabo AgriFinance senior analyst for grains and oilseeds. “Feedstock from waste oils, tallow or vegetable oils is limited, so it’s likely large volumes of vegetable oils will be used. This should create consistent high demand for oilseeds.”

As a result, nearly $2.6 billion will be invested in North America crushing assets within the next three years, Nicholson says.

AN ETHANOL MOMENT

The dramatic development of the U.S. renewable diesel industry is similar to how ethanol changed the U.S. corn industry from 2007 to 2010, says Dan Basse, president of AgResource Company. But he believes renewable diesel could be more disruptive.

“We are calling for 90.5 million soybean acres in 2022 versus this year’s 87 million, and that just gets us started in meeting renewable diesel demand,” he says. “Then we’d need to increase soybean acres by 5 million to 7 million each year. We have to top 120 million acres of soybeans to meet the growing demand for renewable diesel.”

More acres will be needed, as well as higher yields.

“From a farmer’s perspective, particularly those around current or future crushing facilities, there will be an economic incentive to plant more soybeans,” Nicholson adds. “Based on previous studies, soybean basis could increase as much as 15¢ to 30¢ near these large crushing plants.”

BIG OIL INVESTS IN AGRICULTURE

The difference in renewable diesel versus ethanol or biodiesel is a framework already in place. “This is not building a new industry,” Basse says. “Instead, we are retrofitting an existing industry with people who have a lot of money.”

Five plants are currently producing renewable diesel. Future growth will come as previous petroleum refineries are converted to produce bio-based fuels. These plants are owned by some of the largest energy companies in the world.

“The biggest risk for these companies is assuring enough feedstock,” Basse says. “That’s why we are seeing these firms partner with prevailing producers of soy products.”

Energy companies investing with ag companies include:

Chevron partnering with Bunge to expand facilities in Destrehan, La., and Cario, Ill.
Love’s entering a joint venture with Cargill to build a plant in Hastings, Neb.
Marathon partnering with ADM to build a soybean plant in Spiritwood, N.D.

In Iowa, Phillips 66 has invested in Shell Rock Soy Processing, which broke ground last year. In return, Phillips receives access to 100% of the plant’s soy oil, says Mike Kinley, managing member of Ag Development Group.

“Our target is to be able to receive soybeans in July of 2022 and then to be able to crush soybeans in December of 2022,” Kinley says.

When at full capacity, the plant will crush 38.5 million bushels of soybeans annually (110,000 bu. per day). A second soy crushing facility from the group (Platinum Crush in Buena Vista County, Iowa) will be online in 2023.

OIL VERSUS MEAL

One bushel of soybeans creates, on average, 10.7 lb. of crude soy oil and 47.5 lb. of soybean meal. “As this market develops, I’m guessing many will wish those were reversed,” Basse says. “If this has some staying power, you’ll see soybeans bred for more oil going forward.”

Renewable diesel could revolutionize the U.S. soybean industry, says Pete Meyer, head of grain and oilseed analytics, S&P Global Platts.

“We will start crushing for oil instead of meal by 2025,” he says. “The U.S. export system will have to evolve, and that means U.S. soybeans and soy oil stay here and all that soy meal is exported.”

The U.S. has capacity to produce about 900 million gallons of renewable diesel this year and 2.1 billion next year, says Bill Lapp, president of Advanced Economic Solutions. “If you believe all the investments, it could soon be 6 billion gallons. We just won’t have enough feedstock to make it.”

Canola is a promising feedstock, although EPA has yet to approve a pathway for canola-based renewable diesel, but that will change as the industry grows and more feedstocks are needed.

Even then, Lapp says it will be difficult to find enough tallow, used cooking oil, grease, soy oil, corn oil and canola oil to satisfy renewable diesel demand.

As such, Meyer says soybean oil could make up 70% of the total demand picture for renewable diesel and sustainable aviation fuel. That’s more than a hill of beans.

Read, watch and listen to more insights about renewable diesel .

Sara Schafer, content manager for Farm Journal and editor of Top Producer, knows asking good questions creates the most useful stories. She uses her Missouri farm roots to cover innovative operations, business topics and more.

Renewable Fuels: How and When Farmers Will Decide Their Acres

Fri, 22 Oct 2021 20:58:04 GMT

Sustainable aviation fuel and renewable diesel may be the ticket to eliminating the U.S. dependence on China for soybean purchases. The Biden administration is accelerating its efforts to reduce the carbon footprint of the nation’s transportation system. And as a result, soybean growers could soon cash in on a new opportunity around low carbon fuel standards (LCFS).

The growing renewable diesel and sustainable aviation fuel industries are a social issue—not a mandated issue, says Dan Basse, president of AgResource Company.

“We need to double U.S. soybean oil supplies, going from 25 billion pounds to close to 50 billion pounds by 2024. That’s going to take an increase of U.S. crushing by about 60%,” he says. “We will need more soybean acres each year.”

Here’s Why the Jump in Acres Won’t Happen Immediately

The timing for any impact on acres will likely be the 2023 growing season at the earliest. That’s because future growth will come from converting petroleum refineries to produce bio-based fuels. Big oil companies are making investments now and forming partnerships in the process. One example is a new partnership between Chevron and Bunge to expand soybean processing capabilities to keep the renewable energy refineries running.

For 2022, Pete Meyer, head of Grain and Oilseed Analytics, S&P Global Platts, forecasts the corn and soybean combined acreage pool at a maximum of 182-183 million acres. “As far as the mix, we see corn acres down around 3 million acres due to logistical challenges associated with, and the high prices of, nitrogen-based fertilizers. The reverse is expected in soybeans, where we see a 3 million acre increase to 90 million.”

When It Does Happen, It Will Impact Smaller Operations the Most

The farmers with the most focus on corn and soybean acres have an operation that is less than 500 acres, according to Farm Journal’s 2021 Farmer Grower Decision Survey. The larger operations tend to include other crops like wheat in addition to corn and soybeans. But Meyer says that S&P Global Platts does not see a possibility for corn and soybeans to pull from wheat, sorghum or cotton, due to their high prices.

Farmers Will Make Decisions the Way They Always Have

Cash flow and profit potential drive farmer decisions more than anything else, according to Farm Journal’s 2021 Farmer Grower Decision Survey. The top five factors are listed below. Respondents also cited labor implications and agronomics in their decision making.

The Market Opportunities are Strong

Meyer says the potential is so large, renewable diesel and aviation fuels made from soybeans has the potential to be bigger than what ethanol was for corn in the first couple of decades of the 2000s. “The difference with renewable diesel and sustainable aviation fuel is that it’s not an additive,” says Meyer. “It’s not like biodiesel, where you add 10% biodiesel into your regular diesel and it gets pumped into your car. This is 100% fuel.”

In addition to Southwest Airlines , Delta and United have also made commitments to using sustainable aviation fuel. These companies are on board with renewable diesel :

Chevron partnering with Bunge
Love’s entering a joint venture with Cargill
Marathon partnering with ADM
Phillips 66