US biodiesel, renewable diesel imports fall sharply in 2025 after tax credit change

Washington [US], September 5: US imports of biodiesel and renewable diesel significantly decreased in the first half of 2025 (1H25) compared with the same period in previous years. This decline is primarily due to the loss of tax credits for imported biofuels and generally lower domestic consumption of these fuels, according to US Energy Information Administration (EIA).
In 1H25, US biodiesel imports averaged 2,000 barrels per day (b/d), a sharp drop from 35,000 b/d in 1H24. Renewable diesel imports averaged 5,000 b/d, down from 33,000 b/d in 1H24. These import levels were the lowest for the first half of any year since 2012, when U.S. biodiesel consumption was less than half of 2024 levels and renewable diesel consumption was negligible.
One key reason for the sharp drop in biodiesel and renewable diesel imports in early 2025 is the loss in tax credits for imported biofuels. Before 2025, both imported and domestically produced biodiesel and renewable diesel received a $1 per gallon blender's tax credit (BTC). The Inflation Reduction Act replaced the BTC with the Section 45Z Clean Fuel Production Credit in 2025, which only applies to domestic production. This tax credit change placed imports at a relative economic disadvantage.
A second reason biodiesel and renewable diesel imports dropped in 1H25 was low U.S. consumption of these fuels because of uncertainty around blending requirements and negative profit margins for blending biofuels. Compared with 1H24, U.S. consumption of renewable diesel was down about 30% in 1H25, and biodiesel consumption was down about 40%. This lower consumption reduced demand for both imported and domestically produced biofuels.
Source: Emirates News Agency