Projected availability of fats, oils, and greases in the U.S.
The Renewable Fuel Standard (RFS) 2 was established in 2007 with the goals of reducing greenhouse gas emissions and dependence on foreign oil. Each year, the EPA is responsible for proposing future RFS volume requirements in each of the four categories: renewable fuel, advanced biofuel, biomass-based diesel (BBD), and cellulosic biofuel. Recently, the EPA released its proposal for the 2017-2018 RFS mandates. In this proposal, increases of at least 100 million gallons BBD are mandated and even greater increases are expected to fulfill the advanced and renewable mandates.
Setting BBD volumes higher than that which could be produced using domestically available feedstocks would have negative impacts on commodity markets, as well as potentially driving increased imports of both BBD and feedstock. The six major feedstocks used in the production of United States BBD were analyzed to determine future production and consumption trends. The difference between total feedstock production and consumption in non-fuel sectors determines domestic feedstock availability for BBD. Production and consumption of soy oil, canola oil, inedible corn oil, tallow, other animal fats and greases, and yellow grease were projected following historical trends and USDA projections. Key trends associated with increases in vegetable oil yield, livestock production, and population are considered in projections. Increases in soybean oil availability (15 million gallons per year) are projected to be the largest, followed by tallow, canola oil, and other grease, while availability of yellow grease and inedible corn oil are projected to remain flat.
Approximately 1.526 billion gallons of BBD can be produced from domestically available feedstocks in 2018. At the currently proposed volume of 2.1 billion gallons, a minimum of 574 million gallons BBD will need to be produced using feedstocks that are imported or bidded away from other industries. The actual volume is likely to be significantly larger as BBD continues to satisfy portions of the non-BBD advanced and renewable mandates. Furthermore, a projected year over year increase of 31 million gallons is expected throughout the projection period. If the EPA continues to increase the BBD and renewable mandates by more than this amount, the deficit between BBD production and domestic feedstock availability will grow each year.