UPDATE 3-U.S. approves Argentina proposal to qualify for biofuel credits
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NEW YORK Jan 27 (Reuters) - U.S. regulators have given the go-ahead for Argentina's biofuel makers to qualify for U.S. biofuel credits, potentially making it more attractive for South American exporters to sell into the U.S. market and potentially pressuring local prices.
In a statement on Tuesday, the Environmental Protection Agency said it has approved a request from Argentina's Biofuels Chamber (Carbio) for an "Alternative Renewable Biomass Tracking Requirement," which sets out environmental standards needed for foreign producers to join the U.S. Renewable Fuel Standards program.
Requirements include using third-party auditors to monitor manufacturing processes to show that soy used in their biofuel is grown on fields that were not deforested.
The green light will effectively make it easier for the South American grains powerhouse to sell its big biofuel output into the United States, potentially jump-starting the local sector which has suffered from a drop in demand from its No. 1 customer, the European Union, due to a long-running trade spat.
Previously, manufacturers could qualify for the program individually. Carbio's new method will allow them to be tracked and audited as a consortium.
In the United States though, the move is likely to pressure RINS prices and intensify competition as the country pumps out record amounts of renewable fuels amid heightened uncertainty over the controversial program.
"To the extent it makes it more economical to produce biodiesel for the U.S. market, there is the potential they could take market share," said Tim Cheung, a research analyst with ClearView Energy Partners in Washington.
The National Biodiesel Board (NBB) warned it will open the "floodgates" for South American biofuel manufacturers with "very little oversight or verification" that the fuel was grown according to the strict RFS standards. Continued...