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Correspondence Management System

Control Number: AX-14-000-8367

Printing Date: April 22 2014 08:14:10

Citizen Information

Citizen/Originator: Plaza John

Organization: lmperium Renewables, Inc.

Address: 17

41

First Avenue South, Third Floor, Seattle,

WA

98134

Phillips Jonathan

Organization: Renewable Biofuels Incorporated

Address: 4601 Washington Avenue, 260, Houston, TX 77007-5471

Beirne Martin D

Organization:

Address:

Green Earth Fuels

of

Houston

550 Clinton Drive, Galena Park, TX 77547

Van

Heuvelen Robert

Organization: VH Strategies, LLC

Address: 300 New Jersey Avenue, NW, Washington, DC 20001

Constituent: N/A

Committee: N/A

Sub-Committee:

N/A

Control Information

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Status:

Due Date:

Letter Date:

Addressee:

Contact Type:

Signature:

File Code:

Subject:

Instructions:

Instruction Note:

General Notes:

CC:

AX-14-000-8367

Pending

May 6 2014

Apr18 2014

AD-Administrator

Alternate Number:

Closed Date:

of

Extensions:

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Addressee Org:

N/A

N/A

Apr 21, 2014

EPA

EML (E-Mail)

Priority Code:

Normal

DX-Direct Reply Signature Date: N/A

404-141-02-01_141 _b Controlled and Major Corr. Record copy

of

the offices

of

Division

Directors and other personnel.

ORF - Daily Reading File -Application by CARBIO, et al. on behalf of biodiesel companies

from Argentina related to the Alternative Renewable Biomass Tracking Requirement

DX-Respond directly to this citizen's questions, statements, or concerns

N/A

N/A

OEAEE - Office

of

External Affairs and Environmental Education

OECA - OECA -- Immediate Office

R1 - Region 1 -- Immediate Office

R10 - Region 10 -- Immediate Office

R6 - Region 6 -- Immediate Office

Lead Information

Lead Author: N/A

Lead Assignments:

Assigner

Office Assignee

Assigned Date Due Date Complete Date

Brenda Salvador OEX OAR

Apr22 2014

May 6 2014 N/A

Instruction:

DX-Respond directly to this citizen's questions, statements, or concerns

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April 18, 2014

The Honorable Gina McCarthy

Administrator

Environmental Protection Agency

1200 Pennsylvania Ave.,

W

Room 3000

Washington, DC 20460

Re: Application by CARBIO, et al. on behalf ofbiodiesel companies from Argentina related

to

the Alternative Renewable Biomass Tracking Requirement (40 C.F.R. §80.1454(h))

Dear Administrator McCarthy:

As the three largest independent biodiesel producers in the United States, we are writing to

express our deep concern about the process by which the Environmental Protection Agency is

evaluating a petition submitted by CARBIO, the trade association representing Argentine

biodiesel producers, which seeks approval ofArgentine biodiesel as a qualifying fuel under the

RFS2. Our three companies alone have a combined annual name-plate production capacity

of

over 325 million gallons, inclusive

of

the Renewable Biofuels facility in Port Neches, Texas,

Imperium Grays Harbor in Washington State, and Green Earth Fuels ofHouston facility in

Galena Park, Texas.

Approval ofArgentine biodiesel under the RFS2 could have devastating impacts on the

environment and the domestic biodiesel industry. We strongly believe that the CARBIO

application needs

to

undergo a thorough and transparent review process, including a public

comment period, before any determination EPA would make on this new feedstock approval.

We believe that this transparency

s

vital to ensure that the domestic biodiesel industry is not

negatively impacted by foreign producers who are heavily subsidized and not subject to as

stringent regulations in their home countries. We also have grave concerns about foreign

biodiesel producers ' ability to meet the more stringent U.S. recordkeeping requirements

presently required for domestic and Canadian feedstocks under the RFS2. These recordkeeping

requirements are, as you know, the essential element to make sure that the rules are enforceable

and that the RFS2 GHG reductions are met. Further, we do not believe that EPA has the ability,

the resources, or the capacity to inspect and enforce compliance

of

these foreign entities. Just a

few of our concerns are included herein:

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• The direct and indirect land use impacts o Argentine biodiesel production need to be

examined, particularly

i

CARBIO is seeking approval

o

an alternative tracking

requirement;

• The ability o CARBIO producers

to

properly segregate soy beans that are grown along

the Parami River in Brazil and Paraguay from Argentinean soy beans at the crushing

facilities located in Argentina used for qualifying RIN generation;

• Argentine biodiesel is being heavily subsidized by the Argentine government for export,

with a Differential Export T ax that encourages the export

o

finished biodiesel rather

than soybean oil, which threatens to significantly undercut U.

effectively undermine the viability

o

the domestic biodiesel industry;

S

production and

• The Quality Assurance Program has not been finalized, leaving it unclear how EPA

intends to address RFS2 compliance by foreign producers; and,

• The potential impact

o

large volumes

o

subsidized Argentine biodiesel is not being

adequately factored into the proposed RVO

o

1.28 billion gallons for biomass-based

biodiesel in 2014 and 2015.

The land use conversion issues are

o

great concern to us, and should receive a thorough vetting

by the EPA. t is our understanding that the Argentine producers use soybean feedstock from not

only Argentina, but also from Paraguay, Brazil, and other countries as well. CARBIO and the

Argentine government are not in a position to monitor, let alone regulate, land use in other

nations, and deforestation

o

tropical rainforests in South America continues

to

be a major

environmental problem with global impacts.

This is no small matter: the Argentine biodiesel industry produces up to one billion gallons o

biodiesel each year, and we anticipate that up to 600 million gallons or more ofbiodiesel from

Argentina will make its way to the U.S.

i

this application

is

approved, displacing U.S.

production that has met the more stringent RFS2 feedstock requirements.

Additionally,

i

EPA approves the application, we know that import volumes would be

significant because Argentina supports its domestic biodiesel program with a cost-distorting

Differential Export Tax program that would allow each gallon ofbiodiesel from Argentina

to

enter the United States at prices lower than biodiesel produced in the U.S. Out

o

concern for its

own domestic biodiesel producers, the European

Union has already imposed anti-dumping duties

on Argentine biodiesel as a result

o

this Differential Export Tax, effectively shutting Argentine

biodiesel out

o

the EU market and leaving the U.S. market open

to

a flood

o

subsidized

Argentine biodiesel imports.

U.S. biodiesel producers deserve an even playing field, and we urge the EPA to provide the

public with notice and an opportunity

to comment prior to approving any such major

modification

o

the RFS2 rules. This is particularly important in light

o

recent events that may

not have been contemplated under the RFS2 proposed rule, and the lack o meaningful guidance

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provided

to

the public

as

to how EPA might implement a consortium approach overseas. We

believe that the implementation and enforcement

o

the program must be transparent to ensure

compliance. The public, in addition to EPA, should be able to monitor compliance. We also

believe the EPA must ensure that any survey plan approved under Section 80.1454(h) is

designed to achieve at least the same level

o

quality assurance required under the individual

tracking program and the aggregate compliance approach.

In addition, EPA needs to factor in the impact

o

this potential approval on the existing biodiesel

industry, particularly since EPA is proposing to maintain the

2013 RVO

o

1.28 billion gallons

for biomass-based diesel through both 2014 and 2015. t is our estimate that approval o

Argentine biodiesel could result in the annual import

o

almost 6 00 million gallons ofbiomass

based diesel from Argentina. The challenge to domestic biodiesel producers is already mounting:

(i) a carry-over o approximately 300 million D-4 RINs from 2013; (ii) a proposed, stagnant

RVO for biodiesel in 2014 and 2015; and, a proposed reduction in the advanced biofuels RVO.

Add to these a flood o imports from Argentina, and the continued viability o the domestic

biodiesel industry is put into serious question. With the allowance o these Argentine imports,

the U.S. will effectively be trading dependence on foreign fossil fuels for dependence on foreign

and unfairly subsidized renewable fuels.

Again, we urge the EPA

to

take a comprehensive look at the potential impact

o

the Argentine

petition,

to allow for public comment on the petition and land use impacts, and to ensure that

compliance with the stringent standards o the RFS2

is

upheld. Otherwise, support for the entire

program will be undermined, which we know is not the EPA' s intent.

We appreciate your leadership on this issue, and on efforts to help the United States lower its

carbon footprint and move to a more sustainable future.

Sincerely,

John Plaza Jonathan Phillips Martin D Beirne, III

CEO, Imperium Renewables COO, Renewable Biofuels Inc. CEO, Green Earth

Fuels o Houston

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