US refiner Valero claims that registration and tax credit changes have caused biofuel imports to be slowed.

Valero Energy's executive stated on Thursday that U.S. imports of biofuels have not increased quickly enough to help the industry meet the Environmental Protection Agency’s mandates for renewable fuel blends. This is because imports do no longer receive key U.S. taxes incentives.

Executives at the U.S. refinery company stated that many foreign producers were not registered in order to generate compliance credit, which also inhibits imports. This year, the EPA set record?biobased diesel requirements under the Renewable Fuel Standard. Refiners and fuel importers were required to either blend more?biofuel in the nation's supply of fuel or purchase Renewable ID Number credits to comply with their obligations. Imports have historically helped to fill in supply gaps because fuel blenders were able to claim a blender's credit of $1 per gallon on imported bio-based Diesel. This incentive has been replaced by the 45Z?Clean Fuel Production Tax Credit, which benefits domestic bio-based fuel rather than import volumes.

Eric Honeyman said that imports of biobased diesel have increased slower than market participants expected. He made the statement during Valero's earnings conference call.

Honeyman explained that "what's different with the new mandates (from EPA) is that you must be registered in order to generate RINs. Many of these foreign importers have not been registered in order to generate RINs."

"Also, you have the elimination of tax credits for foreign imports... And with the recent announcements about additional tariffs, it makes this hurdle even more difficult."

Scott?Irwin is an agricultural economist from the University of Illinois. He said that while it's true that import biodiesel was not eligible for the 45Z producer tax credit, he disagreed Honeyman's claim about registrations.

He said in an email that the claim?that there are not enough importers registered to meet the (obligations of 2026) is patently false.

Irwin stated that there is enough capacity in the domestic production sector to meet 2026 obligations.

According to Zander Capozzola, principal consultant at Argus Media, through June, the United States imported only 25% of the 40,6 million gallons biodiesel that it imported in the same period of 2024.

(source: Reuters)