US biodiesel imports and renewable diesel plummet after tax credit changes

The U.S. Energy Information Administration reported on Thursday that imports of biodiesel in the United States and renewable diesel in Canada fell to their lowest level in a decade in the first half 2025 following a change of tax credits for these fuels.

This year, the U.S. revamped its tax credit program to encourage biofuel production and use. The changes have effectively ended such incentives for imported biodiesel or renewable diesel. Up until last year, both imports and domestic production received the same $1 credit per gallon. The new program only applies to domestic production.

The EIA stated that "this tax credit change put imports at an economic disadvantage".

EIA data shows that U.S. imports of biodiesel averaged 2,000 barrels a day during the first half this year. This compares to 35,000 bpd for the same period in last year. Imports of renewable diesel fell from 33,000 to 5,000 barrels per day in the first half of this year.

EIA data shows that imports of both fuels were the lowest in the first half of the year.

EIA stated that the decline in imports could also be attributed to a slower consumption rate due to an uncertainty about blending requirements, and low profit margins when blending biofuels.

The EIA stated that although consumption will increase in the coming months to meet the existing mandates of the U.S. Renewable Fuel Standard Program, imports will be low because of the new tax credits.

The EIA stated that "we forecast U.S. net biodiesel imports to be at their lowest level since 2012." (Reporting and editing by Emelia Sithole Matarise in New York)

(source: Reuters)