April 18, 2014

The Honorable Gina McCarthy

Administrator
Environmental Protection Agency
1200 Pennsylvania Ave., NW
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 of Argentine 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 of Houston facility in
Galena Park, Texas.
Approval of Argentine biodiesel under the RFS2 could have devastating impacts on the
CARBIO
environment and the domestic biodiesel industry
. We strongly believe that the
application needs to undergo a thorough and transparent review process, including a p ublic
comment period, before any determination EPA would make on this new feedstock approval
We believe that this transparency is 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:

CREW FOIA 2014-006851-0001986

The direct and indirect land use impacts of Argentine biodiesel production need to be
examined, particularly if CARBIO is seeking ap
proval of an alternative tracking
requirement;
The ability of CARBIO producers to properly segregate soy beans that are grown along
the Pararni 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 Tax" that encourages the export of finished biodiesel rather
than soybean oil , which threatens to
significantly undercut U .S. production and
effectively undermine the viability of the domestic biodiesel industry;
The Quality Assurance Program has not been final
ized, leaving it unclear how EPA
intends to address RFS2 compliance by foreign producers; and,
The potential impact of large volumes of subsidized Argentine biodiesel is not being
adequately factored into the proposed RVO of 1.28 billion gallons for biomas
s-based
biodiesel in 2014 and 2015.

The land use conversion issues are of great concern to us, and should receive a thorough vetting
by the EPA. It 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
, let alone regulate, land use in other
Argentine government are not in a position to monitor
nations, and deforestation of 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 of
biodiesel each year, and we anticipate that up to 600 million gallons or more ofbiodiesel from
. if this application is approved, displacing U.S.
Argentina will make its way to the U.S
production that has met the more stringent RFS2 feedstock requirements.
Additionally, if EPA approves the application, we know that import volumes w
ould 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 of concern for its
own domestic biodiesel producers, the European Union has already imposed anti-dumping duties
on Argentine biodiesel as a result of this Differential Export Tax, effectively shutting Argentine
subsidized
biodiesel out of the EU mark et and leaving the U .S. market open to a flood of
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 sue
h major
modification of the RFS2 rules . This is particularly important in light of recent events that may
not have been contemplated under the RFS2 proposed rule, and the lack of meaningful guidance

CREW FOIA 2014-006851-0001987

provided to the public as to how EPA might implement a "c onsortium" approach overseas. We
believe that the implementation and enforcement of the program must be transparent to ensure
We also
compliance. The public, in addition to EPA, should be able to monitor compliance.
believe the EPA must ensure that any sur
vey plan approved under Section 80.1454(h) is
designed to achieve at least the same level of quality assurance required under the individual
tracking program and the aggregate compliance approach.
In addition, EPA needs to factor in the impact of this pote ntial approval on the existing biodiesel
industry, particularly since EPA is proposing to maintain the 2013 RVO of 1.28 billion gallons
for biomass -based diesel th rough both 2014 and 2015. It is our estimate that approval of
Argentine biodiesel could resu 1t in the annual import of almost 600 million gallons of biomass based diesel from Argentina. The challenge to domestic biodiesel producers is already mounting:
(i) a carry-over of 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 of imports from Argentina , and the continued viability of the domestic
biodiesel industry is put into serious question. With the allowance of 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 of the Argent me
petition, to allow for public comment on the petition and land use
impacts, and to ensure that
compliance with the stringent standards of 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
CEO, Imperium Renewables

Jonathan Phillips
COO, Renewable Biofuels Inc.

Martin D. Beirne, III

CEO, Green Earth
Fuels of Houston

CREW FOIA 2014-006851-0001988