24 September 2009 21:55 [Source: ICIS news]
HOUSTON (ICIS news)--The US Environmental Protection Agency (EPA) is reassessing how it would measure pollution from renewable fuels, a move that could clear the way for a revival of the US biodiesel industry, sources said on Thursday.
Under the current draft of the agency’s renewable fuel standards (RFS), the agency would consider biodiesel derived from soybeans as too much of a pollutant to be considered for fuel mandates. That is because it would measure the amount of greenhouse gases (GHG) given off in all stages of soy-based biodiesel production, from growing the crop to burning the fuel.
So producers were glad after seeing a letter dated 23 September that EPA administrator Lisa Jackson sent to Senator Tom Harkin (Democrat - Iowa) in which Jackson said the agency was reconsidering its methodology in measuring GHG.
“There are significant uncertainties associated with these estimates,” Jackson wrote in the letter. The agency head said EPA staff members were now working with the US Department of Agriculture (USDA) to analyse the proposed methodology.
The EPA confirmed that Jackson wrote the letter, but would not comment further.
Biodiesel producers have considered changing the EPA’s stance as key. The RFS is crucial to their industry’s survival, as it would require 1bn gal/year of biodiesel to be blended into the US fuel supply at a time when domestic demand is nearly non-existent.
At the same time, renewable fuels producers and market analysts have said that if the EPA follows its draft methodology in measuring biodiesel pollutants, soy-based biodiesel producers effectively would be frozen out of the market. That would severely damage the industry, which has already seen production fall more than 30% from last year amid lacklustre demand.
John Plaza, founder and chief executive of Imperium Renewables, lauded the EPA’s new stance.
“I think the EPA has privately recognised its errors,” Plaza said. “We are bullish for the fourth quarter of this year.”
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