CHICAGO (Reuters) - The U.S. Environmental Protection Agency on Tuesday said it was seeking comment on a proposal to reduce 2018 biodiesel blending requirements into the domestic fuel supply.
Prices for soyoil, the most widely used feedstock to produce U.S. biodiesel, fell to a five-week low of 33.23 cents per pound after word of the proposal raised worries of a fall in demand, traders said.
The EPA said a potential decline in biodiesel imports could raise domestic prices and create severe economic harm, allowing the EPA to issue waivers to those obligated to blend biodiesel under the Renewable Fuel Standard, the EPA said in its draft proposal.
The EPA already proposed cuts to 2018 blending volumes for biomass-based diesel and advanced biofuel in July amid complaints from petroleum companies that the requirements added billions in costs.
That came before the Commerce Department on Aug. 23 imposed duties on imports of Argentine and Indonesian biodiesel, a move that will likely curb imports.
“In light of recent developments ... we seek comment on whether it would be appropriate to use this waiver authority in the final rule,” the proposal stated.
The U.S. industry group National Biodiesel Board (NBB) said existing biodiesel capacity of more than 4 billion gallons was sufficient to meet blending requirements for about 2 billion gallons.
“EPA’s proposal earlier this summer was inadequate, underestimating the power of domestic biodiesel production and ignoring the intent of the law. This request for comment is even more disappointing,” NBB Chief Operation Officer Doug Whitehead said in a statement.
Reporting by Michael Hirtzer; Editing by Andrew Hay