ACI Wants EPA to Cut the Fat

The American Cleaning Institute (ACI) urged the Environmental Protection Agency (EPA) to exempt or minimize the use of animal fats under its Renewal Fuel Standard (RFS) program, as it threatens a key raw material used in the cleaning products industry.  Animal fats are a key feedstock used by oleochemical producers, which help supply the production of soaps, laundry detergents, fabric softeners, hard surface cleaners, dish detergents, and personal care products, as well as many other everyday consumer and industrial products.

“ACI remains concerned with the RFS's serious and significant impact on ACI member companies' ability to source animal fats for use as an oleochemical feedstock,” said ACI in written comments on EPA's proposed rule for 2017 RFS standards. “The proposed volumes would continue to divert large quantities of a finite inelastic supply of animal fats to the biofuels market, thereby critically disadvantaging the domestic oleochemical industry.”

“EPA has a responsibility, if not duty, to equally protect all industries that rely on animal fats to produce goods. Agency mandates should not choose winners and losers,” wrote Jacob Cassady, ACI associate director, government affairs.

Among the key points raised by ACI:

• The price of animal fats has increased 95 percent since 2006 under the combined policies of the RFS and tax incentives for biofuels.

• Biofuel production consumes a significant amount of the total supply of animal fats and current policies threaten not only the price but the availability of animal fats for oleochemical production.

• Since 2011 (a historical first) the price of animal fats have exceeded that of Malaysian palm oil.

• Switching to foreign-sourced palm oil by the oleochemical industry threatens 25,000 U.S. jobs.

• EPA must use all its available discretion to exempt or minimize the use of animal fats under the RFS mandates and include the Proposed Rule's impact on the oleochemical industry in its analysis of impacts on other sectors and industries; specifically, EPA must address the potential job loss in collateral industries.

ACI noted that domestic oleochemical manufacturers face disruptions in the market availability and price for animal fats as a direct result of delays in establishing RFS required volumes and the uncertainty of an extension of the biodiesel production tax credits.

“The RFS and biodiesel production tax credit is pricing the domestic oleochemical industry out of the market and forcing it to find cheaper and more plentiful foreign-sourced palm oil, which, over time, will drive this industry overseas,” said ACI in its comments. “EPA must use its discretionary authority to ensure adequate supply of these feedstocks for all industries, not just biofuels. EPA should limit the percentage of the animal fat supply that can be used in the production of biofuels or eliminate animal fats as a feedstock option. It is unfair to place such a heavy burden on a source that is as inelastic as animal fats. By doing so, EPA is deciding which industry wins and which one loses.”

ACI noted that the domestic oleochemical industry has provided decades of economic strength and security.

“Consequently, we urge EPA to use its discretionary power to limit, rather than expand, the use of animal fats under the RFS by lowering the volume requirement or excluding animal fats as a feedstock. The future of a longstanding domestic industry is at stake,” the Institute concluded.

ACI's complete comments are available here.