American bread and donut makers urge Biden to reduce biofuel requirements

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Corn is harvested from Kenison Farms in Levan, Utah on October 5, 2013. REUTERS / Jim Urquhart

WASHINGTON, Aug. 3 (Reuters) – A trade group representing some of America’s largest bakery companies urges the Biden administration to reduce its biofuel ambitions, arguing that using crop fuel could increase the cost donuts, bread and other foods.

The complaints mark the food industry’s unusual entry into the US energy policy debate and place it in an unwitting alliance with Big Oil, which has for years opposed regulations requiring fuels made from corn, soybeans and other crops be added to gasoline and diesel.

The American Bakers Association, which represents companies like Grocer Kroger (KR.N), donut maker Krispy Kreme (DNUT.O) and parent company of Tastykake Flower Foods (FLO.N), told Reuters meeting with the Environmental Protection Agency (EPA) last week to urge reduced blending mandates, especially for biodiesel.

The EPA administers national biofuels laws.

The group has also met with lawmakers involved in the issue to advocate for its cause, according to its chairman Robb MacKie.

MacKie said the group held the meetings because its members heard from suppliers of soybean and canola oil – staple ingredients in many foods – that they could run out of stocks by the end of the year. year, as demand from the biofuels industry exacerbates already strained global markets. .

“We are trying to sound the alarm bells and not be alarmist,” MacKie said.

The bakery companies want the Biden administration to lower biodiesel blending mandates to 2019 levels or at least “stay the course” on any growth, he said.

It was not clear whether their requests would have an impact on the EPA’s decision-making.

The EPA is currently considering new biofuel volume requirements for the coming year under the national biofuels law, the Renewable Fuels Standard (RFS), a process that has been delayed by the economic fallout. of the coronavirus pandemic and by treacherous political considerations.

Nick Conger, an EPA spokesperson, confirmed that the agency had met with the baker’s business group, but did not provide details.

“EPA always values ​​feedback from stakeholders, and we take their concerns into account as well as those of many other RFS stakeholders,” Conger said.

According to US government data, about 40% of soybean oil consumed in the United States is for fuel production, with most of the rest going for food.

THE BATTLE IS BROADENING

The RFS, adopted in 2005 to help farmers and reduce dependence on fuel, has created a market of nearly 20 billion gallons per year for America’s agricultural belt. But oil refiners say it has also created a costly regulatory burden that threatens to bankrupt small refining facilities.

Until now, the struggle for politics has mainly been confined to these two constituencies.

Kurt Kovarik, vice president of federal affairs at the National Biodiesel Council, said now is not the time to slow the progress of biodiesel, which he says is one of the cleanest, low-grade fuels in carbon available.

“The US agricultural sector is still emerging from years of disruption due to trade wars and weather events. The COVID emergency continues to impact markets, including agriculture. The undercutting of the standard on renewable fuels is not a solution, ”Kovarik said.

The average price of food in the United States climbed 2.4% in the 12 months ended in June, from 2.2% previously, according to the Bureau of Labor Statistics at the US Department of Labor.

National production of biodiesel is approximately 130,000 barrels per day, according to the US Energy Information Administration.

Reporting by Jarrett Renshaw, Chris Prentice and Stephanie Kelly; edited by Richard Pullin

Our Standards: Thomson Reuters Trust Principles.


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