2023 Biodiesel Quotas Disappoint U.S. Producers

The newly agreed 2023 quotas for biodiesel, as finalized by the Environmental Protection Agency, have disappointed soybean and canola growers in the U.S. who had hoped for a greater increase in the mandates.

The EPA plans to mandate the use of a total 2.82 billion gallons of biodiesel, to be blended with diesel, this year. The amount is 2.2% higher than the biodiesel mandate for last year, Bloomberg reported, adding that the biodiesel quota for 2024 was set at 3.04 billion gallons and the one for 2025 was set at 3.35 billion gallons.

For 2025, the total amount of biofuels to be added to gasoline and diesel in the United States will be a record 22.33 billion gallons.

The biofuels mandates have been a bone of contention between farmers and refiners for years. Farmers and biofuel makers are holding the upper hand because of the Biden administration’s energy transition plans that feature greater use of biofuels, so some refiners have invested in turning refineries into biofuels production plants.

Yet despite this upper hand, the biofuels lobby apparently wants even higher biofuels blending requirements after making some hefty investments in new production themselves, the Bloomberg report noted.

Proponents of the planned increase in biofuel blending requirements say that it will help ease the volatility of energy markets in the coming years as the world tries to decarbonize rapidly enough to meet international goals including the Paris Agreement. In a press release, the EPA stated earlier this year that its biofuel quota proposal for 2023-2025 “seeks to advance the priorities of energy security, less pollution, and consumer protection.”

The U.S. produced 17.5 billion gallons of biofuels last year and consumed 16.8 billion gallons, with ethanol being the most common. The three most-used biofuels in the U.S. are ethanol, biodiesel, and renewable diesel, with several others also gaining in prominence inducing renewable heating oil, renewable jet fuel, renewable naphtha, renewable gasoline, and other emerging biofuels.

By Charles Kennedy for Oilprice.com

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