The American Bakers Association (ABA) has warned that the baking industry’s access to soyabean oil is under threat due to competing demands from the biodiesel sector, Milling & Baking News reported.
“We are extremely concerned about the available edible oil supply competing with the current demands of biodiesel production using food crops,” ABA president and chief executive Robb MacKie told Milling & Baking News.
“Some wholesale bakers will likely be unable to access soyabean oil by the end of this year because they cannot compete in the marketplace and are unable to procure soyabean oil needs at any price.”
ABA is calling for a pause on biodiesel and advanced biodiesel under the Renewable Fuel Standard (RFS) programme to provide temporary relief for the baking sector at a time when it faces supply chain obstacles, according to the 13 October report.
“It is not the right time for increased biodiesel volumes. The government directive… prevents the baking sector from being able to obtain a reliable supply of edible oils as producers divert supply away from food manufacturing and to renewable biodiesel production,” MacKie added.
Implemented by the Environmental Protection Agency in consultation with the US Department of Agriculture (USDA) and the Department of Energy, the RFS requires that a designated volume of renewable fuel, such as corn-based ethanol or biodiesel and renewable diesel - whose main feedstocks include soyabean oil - replace or reduce the quantity of petroleum-based transportation fuel, heating oil or jet fuel. The required volumes are called Renewable Volume Obligations (RVOs).
The EPA’s last adjustments to the RVOs applied to 2019 and it was now retroactively setting RVOs for 2020 and 2021 while designating required volumes for 2022, the report said.
If previous protocol was observed, the EPA’s proposal would be followed by finalisation of the RVOs in November, Global Risk Management executive director and owner Brian Harris told Milling & Baking News.
“Given the USDA’s current projection for 5M tonnes (11bn lbs) of soyabean oil use for biodiesel in 2021/22, the mandate would have to be raised 3bn litres (800M gallons),” Harris was quoted as saying.
Acknowledging the difficulties facing bakers and other food manufacturers in soyabean oil price and availability, Harris said there should be some normalisation after the first quarter of next year.
ABA senior vice president of government affairs Lee Sanders said bakers had met with Congress and regulators on the issue.
“We thought it was important to paint the picture of what the supply crisis means for food manufacturers of all sizes,” she said.
“We’re speaking on behalf of bakers, but we’re working with others who are experiencing the same kind of supply chain disruption struggles.”
ABA was not against the RFS, Sanders explained.
“We’re all for the programme. But in this case, the timing for an increase in the RVOs is not good.”
Regulators had been listening, but things were coming to a head as the EPA moved forward, Sanders added.
Once the EPA’s RFS proposal was announced, ABA and other edible oil stakeholders would have another opportunity to voice their concerns, the report said.
“Hopefully, that will make a difference as the final levels are set,” Sanders said.
