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The American Bakers Association (ABA) is lobbying with the Biden Administration to lower or at least halt the rising mandates for biofuel blending in gasoline and diesel, fearing that rising agricultural commodity prices could raise the costs for bread and donut makers.
Representatives of ABA have told Reuters that they had met with officials from the U.S. Environmental Protection Agency (EPA) last week to call for reduced volumes of blending of biofuels.
The EPA is the agency responsible for supervising and mandating the so-called Renewable Fuel Standard (RFS), under which oil refiners are required to blend growing amounts of renewable fuels into gasoline and diesel.
The baking industry, however, is concerned that the rising mandates for biofuel blending, and the Biden Administration’s ambitions to continue raising those mandates, will weigh on the agricultural commodities at a time when those commodities have seen prices soar in recent months.
“We are trying to ring the alarm without being alarmists,” ABA’s President and CEO Robb MacKie told Reuters.
Amid soaring agricultural commodity prices and a tight global market, the association’s members are hearing that soy oil and canola oil suppliers could run out of stock by the end of this year, also because of rising demand from the biofuel industry, MacKie told Reuters.
ABA focuses on government policy and is communicating the industry’s needs to federal agencies, such as by providing input to USDA as it explores supply chain security issues, senior ABA officials said in a podcast in June.
“ABA and the baking community also have an opportunity to provide comments to the Environmental Protection Agency, which is responsible for the Renewable Fuel Program that focuses on annual quotas of biodiesel and other renewable fuels. EPA’s decisions need to take into account factors such as price and supply of agricultural commodities and food prices,” said Rasma Zvaners, ABA’s Vice President of Regulatory and Technical Services.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com