US renewable fuels group seeks update on EPA investigation into feedstock imports

A major US renewable fuels trade group has asked for an update on the Environmental Protection Agency’s (EPA) investigation into foreign feedstock imports and urged the agency to adopt more stringent feedstock verification requirements for used cooking oil (UCO) and tallow.

The US Renewable Fuels Association’s (RFA) letter to EPA Administrator Michael Regan, dated Tuesday September 17, follows confirmation in August that the agency was conducting audits of the supply chains of at least two US producers relating to imported feedstocks, including UCO and tallow, used to produce renewable fuel and generate credits under the Renewable Fuel Standard (RFS).

The agency’s inquiry pertains to whether imported virgin palm oil is being mislabeled as UCO to obtain US federal tax subsidies due to UCO’s lower carbon intensity score.

UCO is one of several animal fats, oils and greases that have gained traction in the past year in the production of both US biodiesel and renewable diesel.

There has been increased scrutiny over UCO into the US and in locations across Europe since earlier this year, when trade sources told Fastmarkets that the EPA was reportedly mulling a potential ban on some Asia-origin UCO imports.

In June, the Iowa Renewable Fuels Association said it supported the suspension of US renewable credit generation from imported UCO until “the EPA implements a system for complete traceability and verification of the imports, and the EPA adopts a clearer definition of UCO.”

Market sources indicated that ongoing EPA investigations could potentially prompt the US to limit future UCO imports and/or hike the import tax. This would mean that domestic biofuels producers would shift to the increased use of other feedstocks, such as soybean oil.

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Imports negatively affects the US feedstock market

In the letter, RFA President and chief executive officer Geoff Cooper said that monthly tallow and UCO imports have risen to 627 million lbs in July from 52 million lb in January 2021, and he argued that this flood of imports has negatively affected the US domestic feedstock market.

“The recent surge in imports of… UCO and tallow for biomass-based diesel (BBD) production is suppressing demand and values for domestically produced feedstocks like distillers’ corn oil and soybean oil, as well as the crops from which those oils are derived,” Cooper wrote.

“Today, nearly one out of every six gallons of US-produced BBD is made from imported UCO or tallow – most of which comes from China and Brazil, two countries that maintain punitive import tariffs on US biofuels,” Cooper added.

The RFA said that, if the EPA’s inquiry has been wrapped up, the agency should publicly share its investigative findings and information regarding any corrective actions being taken.

“If the audits are not yet complete, we ask that the agency share an update with the public on its progress and an estimated timeline for completion,” the letter said.

Cooper reiterated the RFA’s concerns that current regulations, especially recordkeeping requirements, are overly lax and “are insufficient to assure the legitimacy of certain imported waste oils, fats and greases.”

The RFA called on the EPA to engage a standards-developing organization to create test methods to differentiate various fats, oils and greases conclusively and quickly, just as the agency requires for the differentiation of co-processed starch and cellulosic feedstock from in-situ ethanol fermentation.

“Without action by the EPA to tighten its verification and recordkeeping requirements, the deluge of… imports of UCO and tallow not only threatens to inflict further economic harm on US farmers and biofuel producers but also to undermine the integrity of the RFS program,” Cooper said.

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