ANKENY, IOWA (January 10, 2023) — Grant Kimberley, executive director of the Iowa Biodiesel Board, has testified before the US Environmental Protection Agency at a Public Hearing on the Proposed Renewable Fuel Standards Rule for 2023, 2024, and 2025. His testimony was as follows:
“Iowa has always been a leader of biodiesel production, and a leader in oilseed processing. Based in part on the promise of a growing biofuels market, significant investments have occurred in feedstock infrastructure, like new soybean-crushing plants. EPA’s proposed volumes would put those in jeopardy.
“Iowa’s eleven biodiesel plants, which have a proven history of generating economic growth and jobs while reducing the nation’s carbon footprint, also stand to lose under this proposal. Our state’s rural economy and Iowa soybean farmers, who rely on stable commodity markets, also come up short if this proposal is finalized. Here’s some economic perspective: A recent study by LMC found that, based on 2021 figures, the biodiesel sector provides over $4 billion in economic activity and sustains more than 10,500 total jobs in Iowa.
“In addition to being a biodiesel leader, Iowa is also a leading producer of animal agriculture. The biodiesel industry remains important to animal agriculture, as growth in soy oil markets benefits those who use soy meal. Every additional bushel of soybeans processed in the US increases supplies of protein, which is a primary input cost for many of the items consumers buy in the grocery store, including meat. Recent market reactions support the notion that increased use of soybean oil for biodiesel and renewable-diesel production affects supplies and the price of soybean meal. Simply stated, more meal supplies will lower the relative cost to produce staples like pork, chicken, turkey, egg, dairy, and even plant-based alternatives. A strong RVO helps keep the prices of these protein products affordable on tables across the globe.
“While soybean oil is only one feedstock option, and growth is expected with other feedstocks as well, increased supplies of soybean oil justify an increased RVO for the 2023 to 2025 timeframe. The negligible increase that EPA proposed will send negative signals to the market and impact existing announcements and future investments. In the immediate reaction to the proposed rule, we have already seen soybean-oil prices fall by 18%, and soybean-meal prices rise by 8%. Those changes in the market are felt throughout the entire economy.
“The proposed volumes for biomass-based diesel and overall advanced biofuel volumes through 2025 are not consistent with the industry’s projected growth, or with the Administration’s own goals to reduce greenhouse gas emissions. Sending the right market signals through increased volumes, in contrast to what EPA currently proposes, would boost our state’s rural economy and Iowa soybean farmers, who rely on strong commodity demand to support their livelihoods and feed the world.”
