US biodiesel credit threatens tallow supply for oleochems - ACI

27 January 2011 02:48  [Source: ICIS news]

ORLANDO (ICIS)--The industry group American Cleaning Institute (ACI) is urging Congress for policies to reduce animal fats use in biodiesel production to ensure feedstock supply for US oleochemical producers, an ACI board official said on Wednesday.

After the biodiesel tax credit lapsed for a year, the US Congress reinstated the $1/gal (€0.73/gal) credit in December 2010 as part of a broader bill called Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.

ACI estimated that 70% of its members use or produce oleochemicals, said Dale Steichen, AkzoNobel’s vice president of research and technology as well as vice chair of ACI’s oleochemical committee. Steichen spoke at the ACI annual meeting being held in Orlando, Florida.

“The $1/gal biodiesel tax credit provides [an] unfair advantage to biodiesel manufacturers purchasing animal fats. Oleochemical producers have no similar credit,” said Steichen.

ACI also noted that the government’s revised Renewable Fuel Standard (RFS2) for biodiesel also distorts traditional demand and supply pricing for animal fats.

“The RFS2 guarantees a stipulated minimum market annually for biodiesel, free of price or other market constraints,” said Steichen.

ACI’s proposal is for policies that either delete animal fats from biodiesel credit or apportion use of animal fats under RFS2 to ensure continued supply for oleochemicals based on historical usage levels.

The ACI meeting ends Saturday.

($1 = €0.73)

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By: Doris de Guzman
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