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FOR IMMEDIATE RELEASE
Contact: Dennis Griesing, 202-662-2518 or dgriesing@sdahq.org
The Soap and Detergent Association
Supports The “Responsible Renewable Energy Tax Credit Act of 2007.”
Congressman Lloyd Doggett Introduces Legislation to Eliminate Biofuel Tax Credit
for Coproduced Renewable Diesel
Tax Credit Favors Oil Companies and Threatens Availability of
Tallow for U.S. Oleochemical Industry
WASHINGTON, DC – May 17, 2007 – “On behalf the Soap and Detergent Association, I want to thank Congressmen Doggett and the other sponsors of ‘The Responsible Renewable Energy Tax Credit Act of 2007.’ The legislation is a critical first step in restoring a balance between biofuel production and other ‘green industries’ such as the domestic oleochemical industry, which have historically relied on some of the same raw materials,” said Dennis Griesing, Vice President, Government Affairs for the Washington-based Soap and Detergent Association (SDA).
“While unintended, the current complex of biofuels subsidies is threatening the continued existence of the oleochemical industry in the United States. Ironically, a historically ‘green’ industry is facing elimination by the subsidization of a new one. SDA believes that both can and should coexist as well as thrive together.”
“The unintended consequences of the biofuel subsidies for ‘coproduction’ renewable diesel, direct burning and ethanol production have driven up the cost of tallow over 80% since the last quarter of 2006,” according to Griesing. “From what we can determine, subsidized ‘coproduction renewable diesel’ on the part of large oil companies poses the greatest issue because it directly threatens the availability of tallow, not just its price.”
Oleochemicals are chemicals, e.g., fatty acids and alcohols, produced from animal fats and seed oils. The US industry is primarily based on tallow, an animal fat. Unlike corn and soybeans for which plantings can be expanded to accommodate new biofuel applications, tallow production is relatively fixed, usually fluctuating less than 2% from year to year. There is no real elasticity in the tallow supply. Cattle herds are not expanded to produce tallow; it is a by-product, not a crop.
“While there has been a great deal of media attention on the impact of biofuel subsidies on food prices, the oleochemical industry is also being hurt. If the price gap between tallow and palm oil is closed, or, if tallow becomes unavailable, the oleochemical industry will be lost to overseas producers and the United States will lose yet another traditional industry,” concluded Griesing.
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The Soap and Detergent Association (www.cleaning101.com), the Home of the U.S. Cleaning Product and Oleochemical IndustriesSM, is the non-profit trade association representing manufacturers of household, industrial, and institutional cleaning products, their ingredients and finished packaging; oleochemical producers; and chemical distributors to the cleaning product industry. SDA members produce more than 90 percent of the cleaning products marketed in the U.S. The SDA is located at 1500 K Street, NW, Suite 300, Washington, DC 20005.
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