U.S. Biodiesel and Renewable Diesel Imports Hit Decade Low After Tax Credit Overhaul

U.S. imports of biodiesel and renewable diesel have plunged to their lowest level in more than a decade following changes to federal tax credits, the Energy Information Administration (EIA) reported Thursday. In the first half of 2025, biodiesel imports averaged just 2,000 barrels per day, down sharply from 35,000 bpd a year earlier. Renewable diesel imports fell to 5,000 bpd from 33,000 bpd over the same period.

The decline stems from a new tax credit structure that favors domestic production, ending the $1-per-gallon incentive previously available to imports. The EIA noted that imports now face a significant economic disadvantage, compounded by weak blending margins and uncertainty around regulatory requirements.

While consumption is expected to rise later this year to meet Renewable Fuel Standard mandates, imports will likely stay subdued, with the EIA forecasting 2025 and 2026 levels to be the lowest since 2012.

The shift from an import-friendly to a production-friendly tax credit structure has redirected biofuel economics decisively toward domestic supply. For US refiners, agricultural producers and downstream distributors, the change reduces exposure to import-market volatility but also increases dependence on domestic feedstock availability - with knock-on implications for soy, canola and used-cooking-oil markets globally.

For biofuel exporters in Southeast Asia, Latin America and parts of Europe, the collapse in US import volumes represents a significant demand-side shock. Some volume will find alternative markets in Europe and Asia, but pricing and offtake risk have risen materially. Broader policy uncertainty around the Renewable Fuel Standard and blender-margin economics adds further complexity for producers planning multi-year capital investments.

Cognitud's supply chain and operations and market intelligence teams work with biofuel and feedstock clients - refiners, aggregators, agribusinesses - on scenario modelling for policy-driven demand shifts, sustainability certification aligned with EU RED III and CORSIA, and disclosure frameworks that give lenders and offtakers visibility into the physical and transition risks that now define the sector.