US Biofuel Imports Hit Decade Low After Tax Credit Shift
US imports of biodiesel and renewable diesel fell to their lowest levels in more than a decade during the first half of 2025. According to the US Energy Information Administration (EIA), the sharp decline followed a change in federal tax credits that now favour domestic biofuel production.
Previously, both imported and US-produced biofuels were eligible for the same $1 per gallon tax credit. However, under the new policy introduced this year, the credit now applies only to fuels produced within the US. This change has made imports less competitive.
“The tax credit change placed imports at a relative economic disadvantage,” the EIA stated on Thursday.
Dramatic Fall in Import Volumes
EIA data shows that biodiesel imports into the US averaged just 2,000 barrels per day (bpd) in the first six months of 2025. This is a sharp drop from 35,000 bpd during the same period last year. Renewable diesel imports also plunged, averaging 5,000 bpd, compared to 33,000 bpd a year earlier.
These figures mark the lowest import levels for the January-to-June period since 2012 for both biodiesel and renewable diesel.
Market Uncertainty and Lower Profit Margins Add Pressure
The EIA attributed the decline not only to the tax policy shift but also to uncertainty surrounding blending requirements and unprofitable margins for fuel blenders. These factors have dampened overall consumption during the first half of the year.
Looking ahead, the EIA expects biofuel consumption to rise as producers aim to meet targets under the US Renewable Fuel Standard (RFS) programme. However, imports are forecast to remain low due to the continued exclusion of foreign biofuels from the federal tax credit.
“We forecast US biodiesel net imports in 2025 and 2026 to be their lowest since 2012,” the EIA noted.
with inputs from Reuters