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EPA proposes record US biofuel mandates: Update
EPA proposes record US biofuel mandates: Update
Updates with new pricing, reactions throughout. New York, 13 June (Argus) — President Donald Trump's administration today proposed requiring record biofuel blending into the US fuel supply over the next two years, including unexpectedly strong quotas for biomass-based diesel. The US Environmental Protection Agency (EPA) proposal, which still must be finalized, projects oil refiners will need to blend 5.61bn USG of biomass-based diesel to comply with requirements in 2026 and 5.86bn USG in 2027. Those estimates — while uncertain — would be a 67pc increase in 2026 and a 75pc increase in 2027 from this year's 3.35bn USG requirement, above what most industry groups had sought. The proposal alone is likely to boost biofuel production, which has been down to start the year as biorefineries have struggled to grapple with uncertainty about future blend mandates, the halting rollout of a new clean fuel tax credit, and higher import tariffs. The National Oilseed Processors Association said hiking the biomass-based diesel mandate to the proposed levels would bring "idled capacity back online" and spur "additional investments" in the biofuel supply chain. The EPA proposal also would halve Renewable Identification Number (RIN) credits generated from foreign biofuels and biofuels produced from foreign feedstocks, a major change that could increase US crop demand and hurt renewable diesel plants that source many of their inputs from abroad. US farm groups have lamented refiners' rising use of Chinese used cooking oil and Brazilian tallow to make renewable diesel, and EPA's proposal if finalized would sharply reduce the incentive to do so. Biofuel imports from producers with major refineries abroad, notably including Neste, would also be far less attractive. The proposal asks for comment, however, on a less restrictive policy that would only treat fuels and feedstocks from "a subset of countries" differently. And EPA still expects a substantial role for imported product regardless, estimating in a regulatory impact analysis that domestic fuels from domestic feedstocks will make up about 62pc of biomass-based diesel supply next year. The Renewable Fuel Standard program requires US oil refiners and importers to blend biofuels into the conventional fuel supply or buy credits from those who do. One USG of corn ethanol generates one RIN, but more energy-dense fuels like renewable diesel can earn more. In total, the rule would require 24.02bn RINs to be retired next year and 24.46bn RINs in 2027. That includes a specific 7.12bn RIN mandate for biomass-based diesel in 2026 and 7.5bn in 2027, and an implied mandate for corn ethanol flat from prior years at 15bn RINs. EPA currently sets biomass-based diesel mandates in physical gallons but is proposing a change to align with how targets for other program categories work. US soybean oil futures surged following the release of the EPA proposal, closing at their highest price in more than four weeks, and RIN credits rallied similarly on bullish expectations for higher biofuel demand and domestic feedstock prices. D4 biomass-diesel credits traded as high as 117.75¢/RIN, up from a 102.5¢/RIN settle on Thursday, while D6 conventional credits traded as high as 110¢/RIN. Bids for both retreated later in the session while prices still closed the day higher. Proposed targets are less aspirational for the cellulosic biofuel category, where biogas generates most credits. EPA proposes lowering the 2025 mandate to 1.19bn RINs, down from from 1.38bn RINs previously required, with 2026 and 2027 targets proposed at 1.30bn RINs and 1.36bn RINs, respectively. In a separate final rule today, EPA cut the 2024 cellulosic mandate to 1.01bn RINs from 1.09bn previously required, a smaller cut than initially proposed, and made available special "waiver" credits refiners can purchase at a fixed price to comply. Small refinery exemptions The proposal includes little clarity on EPA's future policy around program exemptions, which small refiners can request if they claim blend mandates will cause them disproportionate economic hardship. EPA predicted Friday that exemptions for the 2026 and 2027 compliance years could total anywhere from zero to 18bn USG of gasoline and diesel and provided no clues as to how it will weigh whether individual refiners, if any, deserve program waivers. The rule does suggest EPA plans to continue a policy from past administrations of estimating future exempted volumes when calculating the percentage of biofuels individual refiners must blend in the future, which would effectively require those with obligations to shoulder more of the burden to meet high-level 2026 and 2027 targets. Notably though, the proposal says little about how EPA is weighing a backlog of more than a hundred requests for exemptions stretching from 2016 to 2025. An industry official briefed on Friday ahead of the rule's release said Trump administration officials were "coy" about their plans for the backlog. Many of these refiners had already submitted RINs to comply with old mandates and could push for some type of compensation if granted retroactive waivers, making this part of the program especially hard to implement. And EPA would invite even more legal scrutiny if it agreed to biofuel groups' lobbying to "reallocate" newly exempted volumes from many years prior into future standards. EPA said it plans to "communicate our policy regarding [exemption] petitions going forward before finalization of this rule". Industry groups expect the agency will try to conclude the rule-making before November. The proposed mandates for 2026-2027 will have to go through the typical public comment process and could be changed as regulators weigh new data on biofuel production and food and fuel prices. Once the program updates are finalized, lawsuits are inevitable. A federal court is still weighing the legality of past mandates, and the Supreme Court is set to rule this month on the proper court venue for litigating small refinery exemption disputes. Environmentalists are likely to probe the agency's ultimate assessment of costs and benefits, including the climate costs of encouraging crop-based fuels. Oil companies could also have a range of complaints, from the record-high mandates to the creative limits on foreign feedstocks. American Fuel and Petrochemical Manufacturers senior vice president Geoff Moody noted that EPA was months behind a statutory deadline for setting 2026 mandates and said it would "strongly oppose any reallocation of small refinery exemptions" if finalized. By Cole Martin and Matthew Cope Proposed 2026-2027 renewable volume obligations bn RINs Fuel type 2026 2027 Cellulosic biofuel 1.30 1.36 Biomass-based diesel 7.12 7.50 Advanced biofuel 9.02 9.46 Total renewable fuel 24.02 24.46 Implied ethanol mandate 15 15 — EPA Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
India lowers edible oil import duties to 10pc
India lowers edible oil import duties to 10pc
Singapore, 2 June (Argus) — India has lowered import duties on crude edible oils by 10pc effective from 31 May, according to a statement published on the ministry of finance website on 30 May. Customs duties applied to crude palm, crude soybean, and crude sunflower oils were reduced to 10pc from an earlier 20pc. These oils now face effective import duties of 16.5pc compared to 27.5pc previously, including a separate agriculture infrastructure and development cess and a social welfare cess. But import duties for refined versions of the oils were unchanged at 32.5pc. The total effective import tax rate on refined palm, soybean, and sunflower oils remains at 35.75pc. Keeping duties on imported refined oils unchanged is expected to provide relief to the domestic refining industry because it will likely raise the rate of vegetable oil refining in the country, according to Anilkumar Bagani, commodity research head of Indian vegetable oil brokerage Sunvin Group. The move is likely to drive an increase in crude vegetable oil imports, displacing imports of refined oils, Bagani said. This could lower end product vegetable oil prices in India in the short term. But the increase in Indian demand could also cause crude vegetable oil prices to move higher at their respective origins, which could counteract the government's initial objective of lowering prices for the end consumer, he added. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
US tariff ruling could revive biofuel feedstock trade
US tariff ruling could revive biofuel feedstock trade
New York, 29 May (Argus) — A sweeping court ruling Wednesday against President Donald Trump's emergency tariffs could make foreign biofuel feedstock imports, which have wavered this year, more attractive. A three-judge panel on the US Court of International Trade struck down tariffs Trump set under a little-used economic emergency law, including bilateral tariffs on China, "reciprocal" tariffs on nearly every country, and levies on some Canadian and Mexican products to combat drug trafficking. The tariffs upended global trade flows, including by making recently fast-rising inputs for renewable diesel production like Chinese used cooking oil and Brazilian beef tallow more expensive. The trade court gave the government ten days to comply, though the Trump administration has asked for a pause on the ruling and pledged to appeal. Tariffs enacted under other laws, including sectoral tariffs on steel and aluminum imports, would remain intact. Trump could also still eye different authorities to revive his broader tariffs, which he sees as a crucial negotiating tool to counter what he has called unfair trade practices abroad. But the court's decision, if it holds, would still be a significant barrier to Trump's efforts to rewire global trade. The US could even be required to offer refunds of emergency tariffs that have already been paid. US levies on Chinese products imposed under the emergency law at one point reached 145pc, raising fears of a protracted trade war and global economic slowdown. Fewer options for foreign biofuel feedstocks because of tariffs also helped increase the price of domestic alternatives like US soybean oil, where futures were down 2pc in early trading Thursday, and compounded the pain for refiners struggling with major changes to biofuel tax credits. Biomass-based diesel production in the US has been down sharply this year because of all the policy shifts. Formerly fast-rising flow Before this year, renewable diesel and sustainable aviation fuel producers along the US Gulf and west coasts were expanding capacity and increasingly looking abroad for inputs. Waste feedstocks like used cooking oil and beef tallow are considered lower-carbon feedstocks than crops and thus generally fetch larger government subsidies — even if sourced from abroad. The US imported nearly 5.4bn lbs of used cooking oil in 2024, a record-high and with more than half that total coming from China. But Trump's tariffs sharply reduced the incentive to import foreign feedstocks. Duties on Chinese products have varied significantly but were last at 30pc before the court ruling, adding to existing 15.5pc charges on Chinese used cooking oil. Reciprocal tariffs of 10pc on nearly every country added new costs to Australian and Brazilian tallow too. US import data is only available through March, before Trump imposed his most far-reaching tariffs as part of an April "Liberation Day" announcement . But global feedstock traders more recently have said that the tariffs — and the unpredictability of future policy — have made global inputs riskier. While some tariffs are eligible for duty drawbacks, creating options for biofuel producers targeting foreign markets, US imports of Chinese used cooking oil were down 27pc in the first quarter compared to the same period last year. Other barriers remain Even if the court ruling holds, other policies could deter US biorefineries from relying too heavily on foreign feedstocks. For one, current government guidance around a new US clean fuel tax credit prevents refiners from claiming any subsidy for road fuels derived from foreign used cooking oil . Those rules also pin the carbon intensity of canola-based fuels as too high to claim any subsidy, choking off interest in Canadian canola oil imports that had been rising significantly before this year. And farm groups, worried that foreign feedstocks are hurting demand for US crops, are lobbying regulators and lawmakers for more severe limits. A party-line budget bill that passed the House this month would restrict clean fuel tax credit eligibility to fuels derived from North American feedstocks, a win for US oilseed crushers but a major blow to refiners reliant on foreign tallow. While that bill still needs Senate approval and changes would only kick in next year, the proposal is a clear signal from Republicans that refiners should start looking closer to home for renewable diesel inputs. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
New tariffs could upend US tallow imports: Correction
New tariffs could upend US tallow imports: Correction
Corrects description of options for avoiding feedstock tariffs in 12th paragraph. Story originally published 3 April. New York, 10 April (Argus) — New US tariffs on nearly all foreign products could deter further imports of beef tallow, a fast-rising biofuel feedstock and food ingredient that had until now largely evaded President Donald Trump's efforts to reshape global trade. Tallow was the most used feedstock for US biomass-based diesel production in January for the first month ever, with consumption by pound rising month to month despite sharp declines in actual biorefining and in use of competing feedstocks. The beef byproduct benefits from US policies, including a new federal tax credit known as "45Z", that offer greater subsidies to fuel derived from waste than fuel derived from first-generation crops. Much of that tallow is sourced domestically, but the US also imported more than 880,000t of tallow last year, up 29pc from just two years earlier. The majority of those imports last year came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff, and from Australia, which was exempt from any tallow-specific tariffs under a free trade agreement with US. But starting on 5 April, both countries will be subject to at least the new 10pc charge on foreign imports. There are some carveouts from tariffs for certain energy products, but animal fats are not included. Some other major suppliers — like Argentina, Uruguay, and New Zealand — will soon have new tariffs in place too, although tallow from Canada is for now unaffected because it is covered by the US-Mexico-Canada free trade agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024, marking an all-time high, but tallow shipments during the fourth quarter of 2024 fell under the 2023 levels as uncertainty about future tax policy slowed buying interest. Feedstock demand in general in the US has remained muted to start this year because of poor biofuel production margins, and that has extended to global tallow flows. Tallow suppliers in Brazil for instance were already experiencing decreased interest from US producers before tariffs. Brazil tallow prices for export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid support from the 45Z guidance and aid from Brazil's growing biodiesel industry, which is paying a hefty premium for tallow compared to exports. While the large majority of Brazilian tallow exports end up in the US, Australian suppliers have more flexibility and could send more volume to Singapore instead if tariffs deter US buyers. Export prices out of Australia peaked this year at $1,185/t on 4 March but have since trended lower to last close at $1,050/t on 1 April. In general, market participants say international tallow suppliers would have to drop offers to keep trade flows intact. Other policy shifts affect flows Even as US farm groups clamored for more muscular foreign feedstock limits over much of the last year, tallow had until now largely dodged any significant restrictions. Recent US guidance around 45Z treats all tallow, whether produced in the US or shipped long distances to reach the US, the same. Other foreign feedstocks were treated more harshly, with the same guidance providing no pathway at all for road fuels from foreign used cooking oil and also pinning the carbon intensity of canola oil — largely from Canada — as generally too high to claim any subsidy. But tariffs on major suppliers of tallow to the US, and the threat of additional charges if countries retaliate, could give refiners pause. Demand could rise for domestic animal fats or alternatively for domestic vegetable oils that can also be refined into fuel, especially if retaliatory tariffs cut off global markets for US farm products like soybean oil. There is also risk if Republicans in the Trump administration or Congress reshape rules around 45Z to penalize foreign feedstocks. At the same time, a minimum 10pc charge for tallow outside North America is a more manageable price to pay compared to other feedstocks — including a far-greater collection of charges on Chinese used cooking oil. And if the US sets biofuel blend mandates as high as some oil and farm groups are pushing , strong demand could leave producers with little choice but to continue importing at least some feedstock from abroad to continue making fuel. Not all US renewable diesel producers will be equally impacted by tariffs either. Some tariffs are eligible for drawbacks, meaning that producers could potentially recover tariffs they paid on feedstocks for fuel that is ultimately exported. And multiple biofuel producers are located in foreign-trade zones, a US program that works similarly to the duty drawbacks, and have applied for permission to avoid some tariffs on imported feedstocks for fuel eventually shipped abroad. Jurisdictions like the EU and UK, where sustainable aviation fuel mandates took effect this year, are attractive destinations. And there is still strong demand from the US food sector, with edible tallow prices in Chicago up 18pc so far this year. Trump allies, including his top health official, have pushed tallow as an alternative to seed oils. By Cole Martin and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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