US Renewable Diesel Imports Up 29% This Year

FERN’s Ag Insider reported Monday that “the United States imported near-record volumes of renewable diesel fuel in each of the first five months of this year, averaging 30,000 barrels a day, said the Energy Information Administration (EIA). The imports, which were 29% higher than in the same period in 2023, came from one producer, Neste, and were shipped almost wholly to the West Coast.”

“‘Because California, Oregon, and Washington are the only states with active clean fuel programs that incentivize the consumption of renewable diesel beyond the incentives provided by federal policies, renewable diesel is primarily consumed on the West Coast,’ said the EIA, which is part of the Energy Department,” according to FERN’s. “It said the larger imports were probably driven by the expansion of Neste’s plant in Singapore and increased storage capacity at a terminal in Los Angeles.”

The University of Illinois’ Scott Irwin, however, said on the social media platform X that he believes an even more important contributor to the increase in imports is “a race by NESTE to take advantage of the $1 per gallon blenders tax credit (BTC) before it expires at the end of the year. Renewable diesel and (FAME biodiesel) imports are eligible for the BTC but will not be for the new clean fuel producer tax credit (CFPC) that is scheduled to replace the BTC starting on Jan 1, 2025.”

“The change from the BTC to the CFPC next year is likely to have very important trade impacts for both renewable diesel and FAME biodiesel. NESTE is gettin’ while the gettin’ is good, so to speak,” Irwin wrote.

Biomass-Based Diesel Imports Make Up Larger Portion of US Consumption Than Normal So Far in 2024

The EIA also said that “imports of biomass-based diesel — a category that includes both renewable diesel and biodiesel — have made up a larger-than-normal portion of U.S. consumption. In the first five months of 2024, imported biomass-based diesel supplied about 20% of U.S. biomass-based diesel consumption, compared with about 15% in 2023 and 10% in 2022.”

“Roughly half of U.S. soybean oil is used to make biodiesel and renewable diesel,” FERN’s reported. “The fuels have different production methods. Domestic production of renewable diesel surpassed biodiesel in 2023 and reached 3 billion gallons.”

“Although we forecast that more biodiesel and renewable diesel will be imported in 2024 than in previous years in our Short-Term Energy Outlook, we expect imports to decrease in the second half of the year in part because of scheduled maintenance at Neste’s Singapore and Rotterdam plants,” the EIA reported.