Americas News
US Biofuel Imports Fall Sharply in 1H 2025 After Tax Credit Shift
US imports of biofuel and renewable diesel dropped to their lowest first-half levels since 2012 in 1H 2025, as the loss of tax credits for foreign producers and weaker domestic demand cut inflows.
In 1H 2025, biofuel imports averaged just 2,000 b/d, down from 35,000 b/d a year earlier, while renewable diesel imports fell to 5,000 b/d from 33,000 b/d, according to the US Energy Information Administration (EIA) report last week.
One key reason for the sharp drop was a change in US tax policy.
Until the end of 2024, both imported and domestically produced biofuels qualified for a $1 per gallon blender's tax credit (BTC), which was paid to companies blending the fuels into the US supply.
Starting January 1, 2025, the Inflation Reduction Act replaced this system with the Section 45Z Clean Fuel Production Credit. Unlike the BTC, the new credit only applies to biofuels produced in the US, putting imports at a clear economic disadvantage.
At the same time, weaker blending economics cut overall US demand for biomass-based diesel.
Renewable diesel consumption fell about 30% year-on-year in 1H 2025, while biofuel demand declined 40%.
As a result, domestic producers supplied the reduced volumes being blended, leaving little room for imports.
"For example, Neste, the producer of all of the renewable diesel imported to the United States, reported a lower share of exports going to the United States in 1H25 than in 1H24," the EIA said.
The agency sees US biofuels consumption to rise later this year to meet Renewable Fuel Standard mandates, and imports are likely to remain subdued under the current tax regime.
The EIA projects biofuel net imports in 2025 and 2026 to be the lowest since 2012.
Though the use of biofuel bunkered by international ships in the US has seen limited uptake, it has been more common in domestic shipping. Limited imports could add further pressure on availability for the marine sector.
