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The American Soybean Association (ASA) is calling on the U.S. Environmental Protection Agency (EPA) to update its lifecycle analysis for soybean oil utilized in renewable diesel production. The organization contends that the current accounting methodologies under the Renewable Fuel Standard (RFS) place soybean oil at a competitive disadvantage compared to other approved feedstocks.
Established in 2005 and expanded in 2007, the Renewable Fuel Standard has been a crucial catalyst for investment in renewable fuels by mandating progressively increasing volumes of biofuels in the nation's fuel supply. Compliance with this program is facilitated through Renewable Identification Numbers (RINs), which are generated when eligible renewable fuels are produced and subsequently blended into transportation fuels.
ASA highlights that while soybean oil is an approved feedstock for renewable diesel, biodiesel, sustainable aviation fuel, and heating oil, its co-products – renewable naphtha and renewable liquefied petroleum gas (LPG) – are currently ineligible to generate RINs. In contrast, comparable co-products derived from other commercial fats and oils, such as canola oil, distillers corn oil, sorghum oil, and used cooking oil, can qualify for credits under existing EPA approvals.
According to ASA, this disparity originates from the EPA's initial lifecycle analysis for soybean oil renewable diesel, which employed a 'displacement accounting method' for evaluating greenhouse gas (GHG) emissions. Under this approach, renewable naphtha and LPG are treated as substitutes for petroleum products rather than as renewable fuels with their own associated process emissions, thereby precluding their qualification for RIN generation.
The association stated that this methodology was adopted during a nascent stage of renewable diesel technology and indirect land use change modeling, contributing to significant uncertainties in the original analysis.
ASA reports that updated modeling indicates soybean oil renewable diesel and its co-products can achieve the RFS's requirement of at least a 50 percent reduction in greenhouse gas emissions compared to fossil fuels when an 'energy allocation approach' is applied. This method would render renewable naphtha and LPG produced from soybean oil eligible for D4 RINs, consistent with comparable co-products from other approved feedstocks.
Expanding eligibility, the organization notes, would enhance the value of soybean oil for renewable diesel producers and foster improved returns across the entire supply chain.
Using an illustrative production scenario, ASA estimated that renewable diesel output typically comprises approximately 91 percent renewable diesel, 4.5 percent renewable naphtha, 3.5 percent renewable LPG, and 1 percent unrecovered fuel gas. Based on assumed production yields and a RIN price of $2.06, the association calculated that the inability to generate RINs for soybean oil co-products represents a lost value of about 23 cents per gallon of renewable diesel. This loss translates to roughly 33 cents per bushel of soybeans if that value were to be passed back to producers.
While acknowledging that actual values would fluctuate based on market conditions, production yields, and facility operations, ASA emphasized that the exclusion of soybean oil co-products diminishes the overall value refiners can capture from soybean-based renewable diesel.
ASA is urging the EPA to re-evaluate the assumptions used in its initial soybean oil renewable diesel analysis. This re-evaluation should incorporate updated lifecycle data, current production performance, and a co-product accounting approach that aligns with those used for similar feedstocks. The association believes this action would harmonize the treatment of soybean oil with comparable renewable fuel pathways under the Renewable Fuel Standard.
Source: Grain Journal