The American Soybean Association is urging the U.S. Environmental Protection Agency to update its lifecycle analysis for soybean oil used in renewable diesel production, arguing that current Renewable Fuel Standard accounting methods place soybean oil at a competitive disadvantage compared with other approved feedstocks.

The organization said the Renewable Fuel Standard, established in 2005 and expanded in 2007, has been a key driver of investment in renewable fuels by requiring increasing volumes of biofuels in the nation's fuel supply. Compliance with the program relies on Renewable Identification Numbers, or RINs, which are generated when qualifying renewable fuels are produced and later blended into transportation fuels.

ASA contends that while soybean oil is an approved feedstock for renewable diesel, biodiesel, sustainable aviation fuel and heating oil, renewable naphtha and renewable liquefied petroleum gas produced from soybean oil are not eligible to generate RINs. Comparable co-products produced from other commercial fats and oils, including canola oil, distillers corn oil, sorghum oil and used cooking oil, can qualify for credits under current EPA approvals.

According to ASA, the difference stems from EPA's original lifecycle analysis for soybean oil renewable diesel, which relied on a displacement accounting method when evaluating greenhouse gas emissions. Under that approach, renewable naphtha and LPG are treated as substitutes for petroleum products rather than renewable fuels with their own share of process emissions. As a result, the co-products do not qualify for RIN generation.

The association said the methodology was adopted when renewable diesel technology and indirect land use change modeling were still developing, creating significant uncertainty in the original analysis.

ASA said updated modeling indicates soybean oil renewable diesel and its co-products can meet the Renewable Fuel Standard's requirement of at least a 50 percent reduction in greenhouse gas emissions compared with fossil fuels when an energy allocation approach is used. Under that method, renewable naphtha and LPG produced from soybean oil would be eligible for D4 RINs in the same manner as comparable co-products from other approved feedstocks.

The organization said expanding eligibility would increase the value of soybean oil for renewable diesel producers and improve returns throughout the supply chain.

Using an illustrative production scenario, ASA estimated that renewable diesel output consists of approximately 91 percent renewable diesel, 4.5 percent renewable naphtha, 3.5 percent renewable LPG and 1 percent unrecovered fuel gas. Based on assumed production yields and a RIN price of $2.06, the association calculated that the inability to generate RINs for soybean oil co-products represents about 23 cents per gallon of renewable diesel in lost value, equivalent to roughly 33 cents per bushel of soybeans if the value were passed back to producers.

ASA acknowledged that actual values would vary depending on market conditions, production yields and facility operations but said the exclusion of soybean oil co-products reduces the overall value refiners can capture from soybean-based renewable diesel.

The association is asking EPA to revisit the assumptions used in its original soybean oil renewable diesel analysis by incorporating updated lifecycle data, current production performance and a co-product accounting approach consistent with that used for similar feedstocks. ASA said doing so would align soybean oil treatment with comparable renewable fuel pathways under the Renewable Fuel Standard.

Source: American Soybean Association, "The Hidden Cost of Outdated RFS Assumptions for Soybeans: $0.33 a Bushel"