US imports of biodiesel more than doubled in 2023, spurred by lower prices and shifting biofuels policies in Europe.
Biodiesel imports averaged 33,000 b/d last year, compared with 16,000 b/d a year earlier, according to US Energy Information Administration (EIA) data.
The rise in US imports was led by Germany, Europe's leading biodiesel producer. Biodiesel imports from Germany last year climbed to 11,000 b/d from 5,000 b/d in 2022. The US imports soybean oil and some UCO-based biodiesel from biofuel producer ADM's Hamburg, Germany, production facility.
US biodiesel imports from Spain jumped last year to 6,000 b/d from 1,000 b/d.
Rising European imports from China and lower blending targets on the continent pressured European biodiesel prices and posed an opportunity for US importers and blenders to avoid the more expensive domestic alternative. European Fame 0 prices averaged 382¢/USG last year, down by 30pc from 2022, while New York Harbor B100 prices fell by the same percentage but still averaged around $1/USG more than European biodiesel in 2023.
US blenders can take advantage of the lower priced fuel while remaining eligible to receive renewable identification number (RIN) credits that show compliance with the US Renewable Fuel Standard program, as well as the $1/USG blenders' tax credit.
Renewable diesel is not differentiated from biodiesel in EU regulatory programs, leading to a lower share of biodiesel in the EU biofuel pool, compared with the more versatile renewable diesel. Biodiesel must be blended with conventional diesel for motor use, while renewable diesel can be used as a drop-in fuel.
Some EU countries have lowered their biofuels blending targets to combat inflation and rising fuel costs, according to the EIA and US Department of Agriculture, making more biofuel volumes available for export. Sweden last year cut its biodiesel blending mandate for 2024-2026 to 6pc from 30.5pc.
Additionally, EU imports of Chinese biodiesel derived from used cooking oil (UCO) increased in 2023 by 20pc, contributing to Europe's lower prices.
Through February this year, US biodiesel imports rose further, averaging 46,000 b/d, according to the most recent EIA data. But since the end of March, rising European biodiesel prices and a tightening arbitrage to the US has reduced the country's imports from the EU, according to Global Trade Tracker data.
