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The changes in biofuels policy - Renewable Fuel Standard (Standards for Renewable Fuels) announced by the EPA (United States Environmental Protection Agency) this Wednesday (21) weighed even more on soybean oil futures, which lose almost 7% later this morning on the Chicago Stock Exchange. According to the DTN The Progressive portal, biofuel companies “expressed disappointment” at the changes presented today, as they indicate a reduction in the mandate for biodiesel and corn ethanol.
Around 12pm (Brasília time), the derivative's prices lost between 6.93% and 7.07% among the most traded contracts, with October being worth 53.76 cents per pound and May/24, 52.60 cents/lp.
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The EPA's final numbers - in a policy that will be in effect for the next three years - indicated a 250 million gallon reduction in the total volume of corn ethanol for 2024 and 2025 compared to the original proposal, adjusting the volume to 15 billion gallons for the two years.
For 2023, the agency's adjustment for 2023 was 15.25 billion gallons. “This includes a 250 million gallon supplement illegally dispensed by the agency in 2016,” DTN reported.
In the case of biodiesel, the volumes defined in the RFS registered a small increase, however, below expectations. For 2023 the increase was 5.94 million gallons, against the proposed 5.82 billion. For 2024 there are 6.54 billion, while the proposal was 6.62. For the following year, 7.43 billion were defined, while the proposal was 7.33 billion.
Also according to the North American portal, these numbers were leaked and reached the Reuters news agency, promoting the intense movement of devaluation of soybean oil futures on the CBOT since last night.
“COLD WATER BATH”
On international portals, the positions of several biofuel groups converge on a large “cold shower” that they took with the new EPA numbers, mainly because green agendas – including an increase in biofuel mandates – were one of the main promises of campaign of current American president Joe Biden.
Everyone reiterated that the changed policy was a “missed opportunity for the American government to improve its sustainable practices, while at the same time “neglecting” the current moment of investment in production in the sector. See some of these positions.
Clean Fuels Alliance America
“EPA finalized moderate increases in advanced diesel and biomass-based non-cellulosic volumes each year, but did not grow the overall renewable fuel market. The EPA has failed to change biomass-based diesel volumes for 2023, despite rapid increases in American production of biodiesel, renewable diesel and sustainable jet fuel during the first few months of the year. The EPA is undermining the certainty our industry expected from a three-year RFS rule.”
Advanced Biofuels Association
“EPA’s 2023, 2024, and 2025 RVOs are a missed opportunity to invest in and expand the adoption of advanced low-carbon biofuels. To stop climate change, the Biden administration must leverage the tools at its disposal that can be deployed economically using our existing national fuel infrastructure. By choosing not to reflect the available and growing supply of advanced biofuels in this three-year rule, the EPA is overlooking the chance to reduce 7 trillion pounds of CO2 from our atmosphere. This rule negates the Biden administration’s proclaimed vision for carbon reduction.”
Renewable Fuels Association
“The RFS was intended to drive continued growth across all renewable fuel categories well beyond 2022; Instead, today's final rule limits conventional renewable fuels to 15 billion gallons and misses a valuable opportunity to accelerate the energy sector's transition to low- and zero-carbon fuels. Despite the rule's failure to finalize the proposed strong conventional renewable fuel volumes, the action “includes strong volumes for other renewable fuel categories and brings some stability and predictability to the market for the next two and a half years.”
Source: Carla Mendes | Notícias Agrícolas
