EU energy directive worries U.S. soybean shippers

EU energy directive worries U.S. soybean shippers    The American Soybean Association and other U.S. oilseed producer and industry organizations have expressed serious concerns to the U.S. Department of Agriculture and the Office of the U.S. Trade Representative about the European Union's Renewable Energy Directive requirements, and the impact they're having on access for U.S. agricultural products to EU markets.
   The group has asked for a meeting with USDA and USTR to consider options for responding to trade barriers resulting from and influenced by the EU directive, including the immediate initiation of bilateral negotiations between the governments. Further, the group asks USDA and USTR to communicate with third country governments regarding the implications of and needed response to the directive.
   'Since the RED (Renewable Energy Directive) was implemented by Germany on Jan. 1, 2011, U.S. soybean exports to that country have declined significantly, and soybean oil processed in the EU from U.S. soybeans is being re-exported out of the EU,' said American Soybean Association First Vice President Steve Wellman, in a statement. 'As other member states transpose the RED into national law, ASA anticipates the economic viability of exporting U.S. soybeans to the EU will be further eroded, and that a $1 billion market could be lost.'
   For biofuels to qualify for EU tax credits and use mandates, the directive requires that biofuel feedstocks must reduce greenhouse gas emissions by a minimum of 35 percent by 2013, and by 50 percent by 2017, compared to petroleum diesel.
   Based on Brazilian production and transportation data, the EU set the greenhouse gas savings default value for soy biodiesel at 31 percent, short of the 35 percent reduction required. This disqualifies soy as a feedstock for biodiesel. EU-grown rapeseed, however, passed with a 38 percent value.
   Since virtually all of the soybean oil processed from U.S. soybeans in the EU is used in biodiesel production, disqualification jeopardizes $1 billion in annual sales of soybeans to EU markets, the agriculture group warned.
   A study funded by the United Soybean Board (USB) used actual U.S. production and transportation data to show that U.S. soy biodiesel reduces greenhouse gas emission by up to 52 percent. This study has been shared with USDA, USTR and the U.S. Environmental Protection Agency, and has been submitted to the EU's Joint Research Center for their consideration and approval.
   'ASA is also concerned by the possibility that, unless a workable approach to the RED is found, it will establish a precedent for other countries imposing environmental and sustainability requirements on U.S. agriculture,' Wellman said. 'Germany's current implementation of this directive represents a process mandate for systems of production and marketing that act as undue and unjustified trade barriers to imports of U.S. products.'