NATSO testifies before Congress on biodiesel policy

(Photo: Shutterstock)

A travel center executive, Robin Puthusseril, testified on Friday on behalf of NATSO (National Association of Truckstop Operators). She told a House panel that the Renewable Fuel Standard (RFS) is successfully incentivizing travel centers to incorporate advanced biofuels such as biodiesel into their fuel supply, but also warned that the EPA’s recent practice of exempting certain refiners from their renewable fuels obligations undermines the law’s intent and decreases demand for biofuels.

Puthusseril, vice president and co-owner of the Greater Chicago I-55 Truck Plaza in Bolingbrook, Ill., testified before the House Committee on Energy and Commerce Subcommittee on Environment that over the past decade, the RFS has succeeded because it allows fuel retailers to offer biofuel blends to consumers at a price that is less expensive than purely petroleum-based products.

Annual renewable fuel volume obligations established under the RFS are designed to create market certainty and encourage fuel retailers to invest in the infrastructure necessary to incorporate and sell biodiesel. Greater Chicago I-55 Truck Plaza has been incorporating biodiesel into its supply for 12 years, investing more than $500,000 on new fuel tanks, dispenser lines and other infrastructure.

“We do all of this so we can offer the lowest priced fuel possible to our customers,” Puthusseril said. 

Puthusseril testified that EPA’s recent practice of granting an unprecedented number of retroactive hardship exemptions to refineries has functioned as de facto mandate cuts in the biofuel volume obligations. Retroactively issued waivers create market uncertainty, ultimately diminishing the value of the biodiesel investments that Congress encouraged fuel retailers to make when it developed the RFS.

Under the RFS, when a retailer blends biodiesel into diesel fuel, the retailer is able to separate and sell compliance credits known as Renewable Identification Numbers or RINs. The RIN value is then passed along to consumers in the form of less expensive retail diesel fuel. Travel center operators have an incentive to blend biodiesel into our diesel fuel supply under the RFS because blending enables us to separate and sell RINs, which lowers the cost of the goods we sell every day and allows us to better compete for market share, Puthusseril testified.

“As my experience demonstrates,” she said, “the RFS is well-designed to achieve its objectives. Congress recognized in designing the RFS that the only way to get truck drivers to buy more advanced biofuels is to make those fuels less expensive than straight diesel fuel. When EPA mandates growth-oriented, yet achievable volumes of biomass-based diesel that must be incorporated into the fuel supply, it rewards companies that blend biodiesel into diesel fuel because the companies can use the value of the RINs associated with biodiesel blends to lower their costs of goods sold.”

“It is imperative that EPA immediately re-evaluate its criteria for issuing the small refinery waivers,” Puthusseril said. “Going forward, I would hope that EPA act in a manner that is more consistent with the RFS by requiring all waiver requests be received and assessed prior to finalizing biofuel mandates for a given compliance year.”

Puthusseril urged Subcommittee members to ensure that the EPA implements the RFS obligations in a stable, ambitious and growth-oriented manner so that it continues to encourage the consumption of renewable fuels, and also looks out for the best interest of small refiners.

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Chad Prevost

Chad is radio host and broadcast media specialist for FreightWaves.