Document vkOg62qQ5NwGZN3Xx23EEDKR

2018 RFS AND 2019 BIOMASS-BASED DIESEL BIODIESEL, RENEWABLE DIESEL AND ADVANCED BIOFUELS Meeting with EPA Office of The Administrator May 17, 2017 17cv01906 Sierra Club v. EPA ED_001523_00005588-00001 WHO WE ARE 1 U.S. biodiesel and renewable diesel producers, feedstock providers, distributors and marketers - members represent the entire value chain 1 Biodiesel is produced in plants across the country, from California to Maine Biodiesel supports jobs throughout the economy Distribution is flexible, available and growing 1 Biodiesel uses a diversity of feedstocks NBB started by soybean farmers, but has grown to include renderers, used cooking oil, canola oil, etc.... Co-products, by-products and wastes Biodiesel was the first U.S. commercial-scale advanced biofuel. 17cv01906 Sierra Club v. EPA 2 IE BOAFID ED_001523_00005588-00002 EPA MUST CONTINUE TO GROW THE RFS VOLUMES Congress "prioritized" growth "as occurring principally in advanced biofuels" (81 Fed. Reg. at 89,761) "Implied" Conventional at 15 billion ethanol-equivalent gallons 2016 RFS EPA estimated 2.5 billion gallons total biodiesel and renewable diesel as "maximum" - 80 Fed. Reg. at 77,444 Biomass-Based Diesel production alone exceeded 2.6 billion (over 4 billion RINs generated)* RIN Values consistent 2017 RFS NBB believed at least 4.75 billion ethanol-equivalent gallons could be easily achieved for Advanced Biofuels EPA set at 4.28 billion ethanol-equivalent gallons First quarter RIN generation exceeds that of 2016 The Biomass-Based Diesel Industry Has Responded Every Time. *Based on EPA EMTS 17cv01906 Sierra Club v. EPA 3 'NATIONAL BIOIBJOL BOARO ED_001523_00005588-00003 CERTAINTY IS KEY Timely Issuance of Standards We fully appreciate and support EPA's efforts to stay on track from a timing perspective A Strong Growth Trajectory 2018 RFS - At least 5.25 billion ethanol-equivalent gallons can be easily achieved for Advanced Biofuels Biomass-Based Diesel needed to meet Advanced Biofuels would still be below domestic capacity Imports continue to increase and more available, registered capacity There is feedstock available No limitations on distributing and using B20 throughout the Diesel and Distillate fuel market 2019 Biomass-Based Diesel - At least 2.75 billion gallons Strong growth signals from EPA can provide assurances for continued investment Biomass-Based Diesel is providing environmental, economic and energy security benefits sought. 17cv01906 Sierra Club v. EPA 'NATIONAL BIOIBJ0L BOARD ED_001523_00005588-00004 A 2.75 BILLION GALLON D4 MANDATE FOR 2019 WIL UNDERMINE COMPETITION IN ADVANCED BIOFUEL * 2.75 billion gallon BBD mandate supports competition by; * Retaining existing unused US capacity (<65% capacity utilization - based on EIA, not counting many closed/idled plants) * Expanding and diversifying US biodiesel capacity * Promoting additional distribution investments * Allowing for lower transportation costs with increased scale * BBD doesn't compete with other advanced fuels, e.g., cellulosic * No "crowding out" effect from increased D4 mandate * Supports certainty and increased investment in advanced biofuels * Only other commercial-scale advanced biofuel: sugarcane ethanol imports into gasoline market * Uses beyond motor vehicles 5 17cv01906 Sierra Club v. EPA ED_001523_00005588-00005 U.S. Biomass-Based Diesel Market (millions of gallons) Source: EPA EMTS (data as of April 10, 2017) 3000 2500 2000 1500 1000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 6 fNATIONAL BBD RFS Gallons #REF! . EPA BBD Volume 17cv01906 Sierra Club v. EPA ED_001523_00005588-00006 MORE THAN SUFFICIENT AVAILABLE SUPPLY EPA estimates U.S. biodiesel registered capacity at approximately 3.5 billion gallons (81 Fed. Reg. at 89,782) EPA estimates U.S. renewable diesel registered capacity at approximately 0.7 billion gallons (81 Fed. Reg. at 89,872) 3.5 plus .7 = 4.2 billion gallons (>6 billion RINs) Then there's foreign registered production capacity and domestic D5 Over 4 Billion Gallons in D4 Registered Capacity (Imports discussed later) (as of May 2016) Over 4 Billion Ethanol-Equivalent Gallons in D5 Foreign Registered Capacity (Genscape) Over 1 Billion Ethanol-Equivalent Gallons in D5 Domestic Capacity (Genscape) Almost 800 Million Gallons in D3/D7 Foreign/Domestic Capacity (Genscape) Around 18 Billion Potential Available RINs. 7 'NATIONAL BIOIBJOL BOARD 17cv01906 Sierra Club v. EPA ED_001523_00005588-00007 Foreign Capacity - Active* Domestic Registered Capacity Totals = 1,985 MG Data collected from U.S. EPA EMTS *From Key Countries 17cv01906 Sierra Club v. EPA 1,976 MG 2,093 MG 2.6 BG* More than 6.8 billion gallons in registered capacity 2,890 MG 4.2 BG ED_001523_00005588-00008 FEEDSTOCK PRICES AT OR BELOW 5 YEAR AVERAG Feedstock Prices with BBD RVO at 2.75 billion in 2019 and Advaned Biofuels RVO at 5.25 billion in 2018 45.00 40.00 35.00 4^.................. Cents per Pound 30.00 . 25.00 .............11^ 20.00 .............Ill...... ||M 15.00 ................................. |||TM ||||H 10.00 .............. ....... 5.oo ..............jlH^................. ........................................... 0.00 ................ ------------------------------------------------------------------------------------------------------------------------------------------------------------------- 2018 2019 Choice White Grease ; Soybean Oil Yellow Grease * 2012-16 ave SBO "2012-16 ave YG 2012-16 ave CWG 17cv01906 Sierra Club v. EPA ED_001523_00005588-00009 2017 TRE SUPPLIE! U.S. Soybean Stocks-to-Use 17cv01906 Sierra Club v. EPA LEASED RAW MATERIAL Large projected US supplies of vegetable oils * Record US soybean acreage in 2017 (Mar Prospective Plantings Report) * Stocks to Use ratio projected to be 2x recent years Record US meat production (2017 AgOutlook Forum) Large South American crop harvested (WASDE) ED_001523_00005588-00010 MORE THAN SUFFICIENT FEEDSTOCI EXPANSION OF SLAUGHTERING CAP Pork Packing Capacity Expansion Plans |||^ R yRW*fJR IlPim!!nRI!lini!inI liSBSSs IIIIIIIIIIIIIIB Fall 2016 Fall 2017 Fall 2018 Daily Hd Ann Hd Daily Hd Ann Hd Daily Hd Ann Hd Pj*.: S i } 2,500 625,000 2,500 625,000 2,500 625,000 Windom, MN 4,000 1,000,000 4,000 1,000,000 Sioux City,IA 12,000 3,000,000 12,000* 3,000,000 10,000 2,500,000 10,000 2,500,000 10,000 2,500,000 Total 2,500 625,000 12,019 28,500 7,125,000 |j|i||j||||il| 38,500 9,625,000 185,096 Pct of'15 avg = 2.195 mil. p.-f ...f ,.t -<v,;r : .. ... y;-' r;i 0.5% 0.5% 6.2% 5.5% 8.4% 7.4% *This plant could process 20,000 head per day if double-shifted by the end of 2018 Last Updated: 11/2/16 ppr^ "checkoff 17cv01906 Sierra Club v. EPA ED_001523_00005588-00011 MORE THAN SUFFICIENT FEEDSTOCK EXPANSION OF OILSEED PROCESSING CAPACIT Recent Headlines * Ag Processing Inc. to Construct Soybean Processing Plant in South Dakota--Dec 12, 2016 * Zeeland Farm Services building second soybean facility in Ithaca --October 5, 2016 * Minnesota Soybean Processors to pursue ND soybean processing plant --Feb 8, 2017 17cv01906 Sierra Club v. EPA ED_001523_00005588-00012 2018 Advanced Biofuel = at least 5.25 billion gallons 2019 Biomass-based Diesel Volume = at least 2.75 billion gallons 17cv01906 Sierra Club v. EPA , : r >: " ! ',l ' BOARD ED_001523_00005588-00013