Bakers Urge EPA to Decrease Proposed Advanced Biofuel Volumes in the Renewable Fuel Standard

Relief Needed for Edible Oil Supply Crisis

Today at the Environmental Protection Agency’s (EPA) public hearing on the Renewable Fuel Standards (RFS) for 2020, 2021, and 2022 Proposed Rule, wholesale bakers strongly urged the EPA to decrease the proposed advanced biofuel quotas in order to protect an already challenged food supply chain.

“The EPA’s proposed increase in advanced biofuel required volume obligations (RVOs) could jeopardize the ability for our Members to meet the constant demand of providing millions of baked goods to grocery stores, restaurants, and federal feeding programs,” said Lee Sanders, Senior Vice President, Public Affairs and Government Relations, American Bakers Association (ABA).  “That’s because soybean oil, a critical ingredient for bakers, has been increasingly diverted away from the food supply chain and towards the production of advanced biofuels, as federally directed by the EPA’s RFS program.” 

“Non-food use for biodiesel and renewable diesel has expanded greatly with the potential to double in the next two years,” said Ed Cinco, Director of Purchasing at Schwebel’s Baking Company. “As a result, vegetable oil prices have tripled in the past 12 months and possibly faces rationing and shortages for 2022.” 

“It is to the point where food companies cannot get quotes for future deliveries unless you are a current customer and even then, vendors are only willing to go through Q2 of 2022 at an escalated price,” Cinco added. "This means for some food companies, edible oil literally will not be available at any price due to diversion of edible oil from producing food."

Existing domestic refining capacity for soybeans cannot keep up with the demand from both food and fuel sectors despite record yields from America’s hardworking farmers. in September and October of 2021, the U.S. became a net importer of soybean oil for the first time in more than a decade.

“More soybean oil refineries are coming online, expected in 2023 and later, to keep up with advanced biofuel volume requirements, but the food industry’s need is now,” emphasized Sanders. “EPA has the power to adjust their requirements and prevent even more chaos in our already, battered, food supply chain.”  

Prior to finalizing its RVOs for advanced biofuels, the baking industry highlighted two critical elements for the EPA to consider:  

First, the Clean Air Act requires EPA to correct and update its Regulatory Impact Analysis to use accurate and current food and commodity economic data. The actual price for soybean oil for 2020/21 was 75% higher than the assumption used by EPA. The actual price of soybean oil for 2021/22 was 91% higher than EPA’s assumption.  

Second, EPA should use its statutory authority under the RFS program to decrease the proposed advanced biofuel quotas to avoid negatively impacting Americans’ ability to find and afford food staples such as baked goods.  

In addition to the verbal testimony, ABA will submit written comments to detail the baking industry’s dire need for access to soybean oil, a ubiquitous, critical ingredient.