Let the White House Know Your Environmental Questions on
Non-Ester 'Renewable Diesel' (NERD) By Friday



Non-ester "renewable diesel" (NERD) can be made by incorporating oils or fats or other biomass into existing petroleum refineries to make a hydrocarbon fuel that could potentially be used as a fuel for diesel engines. NERD is not biodiesel and does not meet ASTM D 6751 standards. NERD contains no oxygen, so does not have many of the same benefits as biodiesel (biodegradable, non toxic, adds lubricity, significant particulate matter reductions).

A Treasury Department decision made in early April approved a request from ConocoPhillips and Tyson Foods, Inc. to expand the definition of “renewable diesel” made through thermal depolymerization in the Energy Policy Act of 2005. The Treasury ruling will allow these companies to benefit from a $1-per-gallon tax incentive, like biodiesel. See the story which ran in the Houston Chronicle for more details.

Biodiesel is the only alternative fuel to perform EPA Tier I and Tier II testing to quantify emission characteristics and health effects. Yet, much is unknown about NERD. EPA will have to assess the environmental attributes of NERD, to ensure America doesn’t face the diesel refinery version of MTBE. The National Biodiesel Board supports the use of renewable fuels by all companies, but it is imperative that each of these new fuels investigate their effects on the air, land, and water and that they comply with the Clean Air Act registration and health effects testing requirements.

It is also imperative these new fuels undergo proper in-use testing and evaluation needed to secure an appropriate ASTM fuel standard. Without an approved ASTM standard, and the technical data and information needed to secure such a standard, it will be impossible for engine or vehicle companies to tell their customers use of these new fuels will not harm their engines. Without these standards in place, we very well could encourage fuel equivalent of the next ‘1980 Oldsmobile diesel’, harming the reputation of all renewable fuels and putting the efforts back a generation.

Only weeks after the Treasury ruling they lobbied to receive, ConocoPhillips this week announced their intent to begin production of as much as 175 million gallons per year of NERD. What they haven’t said is that under the new Treasury ruling taxpayers will pay ConocoPhillips $175 million to do it.

The National Biodiesel Board, on behalf of the biodiesel industry, strongly opposes the ruling by Treasury to expand the tax incentive for refineries making NERD in their existing equipment for reasons that include:

• It sends dangerous signals to other countries to engage in unsustainable agriculture practices to quickly meet the rising demand for raw vegetable oil.
• The resulting fuel does not contain any oxygen, unlike cleaner-burning biodiesel, and does not offer the same benefits of biodiesel in terms of being non-toxic, biodegradable, increasing fuel lubricity, and significantly reducing harmful particulate matter emissions from diesel engines.
• Allowing large integrated refineries to claim a subsidy for dumping raw domestic or imported vegetable oil into the refining process will not add any fuel refining capacity to America’s energy infrastructure.
• This will hamper energy security efforts and will simply subsidize oil companies for their existing capacity. By contrast, biodiesel plants coming on line since the tax incentive took effect have added fuel capacity numbering in the hundreds of millions of gallons.
• The oil companies could put a stranglehold on materials used to make biodiesel, stunting the growth of the biodiesel industry, and leaving America’s young biodiesel companies on a “bridge to nowhere.”
• It will be an unanticipated drain on the U.S. Treasury.
• This process will not add new American jobs in a significant way. The biodiesel industry, however, is expected to add 40,000 jobs to the U.S. economy.