The U.S. Environmental Protection Agency (EPA) said it is seeking public comment on a proposed reduction in the amount of biofuel blending in the fuel supply in 2018.

Soyoil prices on the Chicago Board of Trade fell after the EPA announcement, hitting a five-week low of 33.23 cents a pound. Traders say the market is worried about falling demand for soyoil. Soybean oil is the main raw material for biodiesel production in the United States.

In a draft proposal, the EPA said that biodiesel imports could decline, which would raise domestic prices and cause serious economic harm, and therefore the EPA proposed to reduce the amount of biodiesel blending under the Renewable Fuel Standard Act (RFS).

In July, the EPA had recommended lower blends of biomass diesel and advanced biofuels for 2018, after oil companies complained that the rules would add hundreds of millions of dollars in costs.

The U.S. Commerce Department on Aug. 23 imposed countervailing duties on Argentine and Indonesian biodiesel, a move that could limit the scale of imports.

According to the National Biodiesel Board (NBB), an industry body, there is more than 4 billion gallons of biodiesel capacity in the United States, enough to meet about 2 billion gallons of blending demand. DougWhitehead, NBB's chief operating officer, said the EPA's recommendations earlier this summer were inadequate, underestimated domestic biodiesel production capacity and ignored the purpose of the RFS rule. Seeking public opinion at the moment is even more disappointing.