Biodiesel imports to the US fell sharply after changes in tax incentives

Imports of biodiesel and renewable diesel into the United States fell to a 10-year low in the first half of 2025 after changes to tax breaks for such fuels took effect, BioFuels reports, citing data from the Energy Information Administration (EIA).

This year, the government changed the way it provided tax breaks that were supposed to encourage the production and consumption of biofuels. These changes effectively eliminated incentives for the import of biodiesel and renewable diesel.

Previously, domestic production and imports had the same tax break of €0.85/gallon, but now the breaks only apply to domestic production, making imports economically unviable.

According to the EIA, in the first half of 2025, biodiesel imports to the United States decreased compared to the same period last year from 35 thousand barrels/day (on average) to 2 thousand barrels/day, and renewable diesel imports from 33 thousand barrels/day to 5 thousand barrels/day, which are the lowest figures for the 1st half of the year since 2012.

The reduction in imports is also due to a decrease in domestic fuel consumption due to uncertainty with blending requirements and negative margins in biodiesel production.

The EIA previously reported that renewable diesel production in the US is declining, despite ambitious plans.