Capping the price of Renewable Identification Numbers would undermine the integrity of the Renewable Fuel Standard — market prices for farmers would be lowered while feed costs for livestock producers would go up, ultimately costing jobs in the Show-Me State, according to the Missouri Soybean Association.
“Missouri has always been right up front on biodiesel, and we can’t sit back now and let the currency on which the RFS runs be devalued,” said C. Brooks Hurst, president of the Missouri Soybean Association. “Limiting the RFS with RINS caps is directly contrary to the commitments President Trump made the American Farmers and rural communities that elected him. The RFS works for Missouri and it works for agriculture.”
The Missouri Corn Association takes a similar stance stating that a RIN cap at any value is wrong and weakens the RFS.
A RIN is a serial number assigned to a batch of biofuel for the purpose of tracking its production, use, and trading as required by the RFS. U.S. Sen. Ted Cruz, R-Texas, has proposed placing a hard cap on the price of RINs as a way to assist some petroleum companies. The biofuels industry, including biodiesel and soybean interests, are opposed to the proposed cap on RIN prices as it would reduce biofuel demand and undermine the RFS. While biodiesel is not being cited as a problem and not targeted directly, many of the proposals that have been discussed to revise the RFS would have an adverse impact on biodiesel demand.
President Donald Trump and the administration have held multiple meetings with stakeholders, including USDA and biodiesel companies, to hear perspectives and determine if any actions would be agreeable to both sides. USDA Secretary Sonny Perdue has cited the importance of the RFS to agricultural markets, indicated his strong support for the RFS and pledged to continue working to ensure that the program would not be diminished.
“Placing any cap on the price of RINs is a misguided step that destroys demand for biodiesel and other renewable fuels. Analysis from the National Biodiesel Board (NBB) and the World Agricultural Economic and Environmental Services (WAEES) shows up to 300 million gallons in biomass-based diesel volumes would be lost each year as these volumes would no longer be utilized for compliance with the RFS conventional biofuels requirements,” said John Heisdorffer, president of the American Soybean Association.
As the second-largest biodiesel producer in the U.S., Missouri generates about 200 million gallons of biodiesel each year. That production supports more than 2,500 Missouri jobs directly. Including indirectly related jobs grows that number to 6,400. Soybean production and processing contributes 20,700 jobs to Missouri’s economy.
The NBB and WAEES analysis showed that soybean producers would receive approximately 16 cents less per bushel thanks to reduced demand. That lower demand for soybean oil means livestock producers are expected to pay more for their soybean meal, amounting to roughly $185 million more in feed costs due to a cap on RINs.
“Furthermore, this idea is simply unnecessary,” said Heisdorffer. “The RFS program is working as intended – diversifying our nation’s fuel supply, increasing energy security, reducing fuel emissions, and promoting markets for farmers and rural America. RFS stakeholders, including petroleum refiners, have stated that biodiesel is not a problem, yet all of the proposed RFS revisions would first and foremost adversely impact biodiesel. Reduced biodiesel production equals reduced demand for soybean oil, hurting the bottom line for soybean farmers and adversely impacting rural economies. We’re already facing great market uncertainty as a result of the tariffs and trade issues. Action to cap RIN prices and undermine the RFS will exacerbate the economic damage to farm families like mine.”
Alisha Shurr was a reporter for The Missouri Times and The Missouri Times Magazine. She joined The Missouri Times in January 2018 after working as a copy editor for her hometown newspaper in Southern Oregon. Alisha is a graduate of Kansas State University.
