U.S. Bread, Donut Makers Urge Biden to Roll Back Biofuel Requirements

WASHINGTON, Aug. 3 (Reuters) – A trade group representing some of America’s largest baked goods companies is calling on the Biden government to scale back its biofuel ambitions, arguing that using plant fuel increases the cost of donuts, bread and other foods could increase.

The lawsuits mark an unusual entry for the food industry into the US energy policy debate, placing them in an unwitting alliance with Big Oil, which has for years opposed regulations requiring that fuels made from corn, soybeans and other crops be used in the energy supply of the US Gasoline and diesel are included in the country.

The American Bakers Association, which represents companies like grocer Kroger (KR.N), donut maker Krispy Kreme (DNUT.O), and Tastykake parent company Flower Foods (FLO.N), told Reuters it had contacted the Environmental Protection Agency (EPA.) last week to push for reduced blending regulations, especially for biodiesel.

The EPA administers the country’s biofuel laws.

The group has also met with lawmakers involved in the matter to move their case forward, according to President Robb MacKie.

MacKie said the group held the meetings after its members heard from suppliers of soybean and rapeseed oil – a staple of many foods – that they could run out of inventory by the end of the year as demand from the biofuel industry tends to increase already tense global Markets tightened.

“We’re trying to raise the alarm without being alarmists,” MacKie said.

Bakery companies want the Biden government to lower biodiesel blending mandates to 2019 levels, or at least “hold the line” with any growth, he said.

It was unclear whether their claims would affect the EPA’s decision-making.

The EPA is currently reviewing new biofuel volume requirements for the coming year under the national biofuel act, the Renewable Fuel Standard (RFS), a process delayed by the economic fallout from the coronavirus pandemic and tell-tale political considerations.

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

“The EPA always values ​​stakeholder input, and we consider their concerns along with those of many other RFS stakeholders,” said Conger.

According to the US government, around 40% of the soybean oil consumed in the United States is used to make fuel, with the remainder being used for food.

BATTLEWIDTHS

The RFS, passed in 2005 to help farmers and reduce reliance on fuel, created a market of nearly 20 billion gallons a year for the U.S. farm belt. But oil refineries say it has also created a costly regulatory burden that threatens the bankruptcy of smaller refineries.

So far, the political struggle has been largely confined to these two constituencies.

Kurt Kovarik, vice president of federal affairs for the National Biodiesel Board, said now is not the time to slow the progress of biodiesel, which he believes is some of the cleanest, low-carbon fuels on the market.

“America’s agricultural sector is still recovering from years of disruption from trade wars and weather events. The COVID emergency continues to affect markets, including agriculture. Going below the renewable fuel standard is not a solution, ”said Kovarik.

According to the U.S. Department of Labor’s Bureau of Labor Statistics, average food prices in the United States rose 2.4% in the 12 months to June from a previous 2.2% increase.

According to the US Energy Information Administration, the domestic production of biodiesel is around 130,000 barrels per day.

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

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