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New Biodiesel Levels Will Further Increase Food Prices: NRF

nrf jun07 lt

Biodiesel levels set by the Environmental Protection Agency for 2022 are too high and will drive up inflation for already high food prices, according to the National Retail Federation or NRF.

The retail trade association said the food prices are expected to grow more for processed foods especially that rely on food oils from crops like soybeans.

The association projects that there won't be enough food oil for everyone over the next two years or so, and that unless the biodiesel mandate is temporarily relaxed, food manufacturers and American consumers will take a backseat to fuel refiners.

The EPA last week set the Renewable Fuel Standard or RFS program's biodiesel blending mandate for 2022 at 5.63 billion gallons, a 22 percent increase over 2020. This was despite NRF's request to EPA to keep the biodiesel mandate at 2020's 4.63 billion gallons temporarily to allow supplies of the oils to catch up with demand. NRF then cited the Clean Air Act, which requires the EPA to consider commodity and food prices when setting RFS levels.

The association said it asked the administration for a temporary reprieve until enough supply can be brought into the system that food manufacturers aren't totally crowded out by refiners, and that it's not just a price issue.

NRF Senior Vice President David French although American farmers are producing more and more soybeans, it's not enough to keep up with demand from biofuel refiners.

The EPA's move and NRF's forecast come at a time when the world is seeing severe shortage for edible oils that has been driven by their increased use as biodiesel fuel and, more recently, Russia's invasion of Ukraine, the world's largest producer of sunflower oil.

Similar to the U.S. RFS program, other governments around the world have also set biofuel mandates, which require ever-higher volumes of corn ethanol and soy biodiesel and require crops to be diverted from food production. These lead to fierce competition between biodiesel refineries and food manufacturers that rely on a steady supply of soybean, canola, sunflower and other edible food oils.

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