The American Soybean Association (ASA) and Iowa Soybean Association today applauded the release of the Environmental Protection Agency’s (EPA) Final Rule for the Renewable Fuel Standard Program (RFS2) that they say provides a positive outcome for biodiesel and soy biodiesel.

EPA’s Final Rule demonstrates that soy biodiesel can achieve significant Greenhouse Gas (GHG) emissions relative to petroleum diesel, ASA officials say. Even with the inclusion of questionable indirect land use variables, all soy biodiesel is deemed by EPA to exceed the 50% reduction threshold needed to qualify for the RFS2 biodiesel mandate.

“This favorable EPA ruling is absolutely critical to the continued success of soybeans as a homegrown renewable fuelstock,” says ASA President Rob Joslin, a soybean producer from Sidney, Ohio. “ASA and the biodiesel industry were able to demonstrate that some of EPA’s initial calculations regarding direct and indirect emissions were significantly flawed, and that the agency had used questionable indirect land-use assumptions.”

“This is good news for Iowa as one of the leading biodiesel- and soybean-producing states,” says Delbert Christensen, ISA president and a soybean farmer from Audubon, Iowa. “Today’s rule affects jobs in the biodiesel industry in addition to affecting soybean farmers by ensuring there will continue to be a baseline of demand for soybean oil. Studies show increased demand for soybean oil has helped bolster prices in recent years.”

EPA will require the combined 2009 and 2010 volume levels to be met, which will require the utilization of 1.1 billion gallons of biodiesel by the end of 2010, significantly energizing demand for U.S. biodiesel producers, the ASA says.

The ASA says it is also pleased that agricultural feedstocks produced in the United States will be in compliance and no additional certification will be required unless the baseline level of approved agricultural land is exceeded. EPA will require certification for foreign feedstocks.

“ASA fought against the burdensome and unnecessary requirement that renewable fuel manufactures prove that their feedstocks meet the definition of renewable biomass,” Joslin says.

While stressing the importance of the EPA’s RFS2 final rule to the biodiesel and soy industries, Joslin emphasized that biodiesel production likely won’t resume until Congress extends the biodiesel tax incentive. The biodiesel tax incentive expired on December 31.

“Expiration of the tax incentive has essentially caused the production and use of biodiesel in the U.S. to cease and has placed the 23,000 jobs that are currently supported by the domestic biodiesel industry in immediate jeopardy," Joslin says. "Companies have already started laying off employees, and this situation is certain to worsen the longer the tax incentive is allowed to lapse.”

Gasser says the ISA were able to provide data from its Environmental Programs and On-Farm Network research that was much more favorable and showed that modern soybean production is much more efficient than shown by the information the EPA was relying on from the USDA, dating back to the 1980s.

“Thanks to effort made by soybean farmers, it ended quite favorably,” Gaesser says. “This is truly valuable to the future of biodiesel. At the same time, we still need Washington to come through with the tax incentive for biodiesel.”