US East coast biofuel blenders and suppliers are relying more on railed supply from the midcontinent after federal tax incentives to import the fuel have faded.
The East coast has historically relied on imports from Europe and Canada to fill regional biodiesel blend mandates in the northeast, as the US blenders tax credit (BTC) granted a flat $1/USG to domestic biodiesel blenders regardless of the fuel's origin. But the new 45Z clean fuel production credit, which replaced the BTC beginning this year, blocks out imports from any federal subsidies, closing arbitrage opportunities for US importers and leading blenders to look toward domestic railed volumes.
East coast imports through January and February averaged just 2,000 b/d, split between Canada and Norway, compared with 36,000 b/d in 2024, according to Energy Information Administration data. The region received no imports from Germany to begin the year after importing 10,000 b/d a year earlier. US agribusiness Archer-Daniels-Midland's plant and export facility in Hamburg, Germany, was historically a large supplier into New York Harbor before the shift in federal incentives.
Overall US imports were down by 90pc over the same period at 4,500 b/d.
The lack of imported volumes has forced regional blenders and suppliers to lean more on delivered rail volumes from the soy-rich midcontinent that is home to most domestic production.
Rail shipments from the midcontinent to the East coast averaged 7,000 b/d in January and February this year, up by 22pc over the year, despite lower year-on-year US output.
East coast suppliers will likely continue to rely heavily on domestic rail volumes absent a return of the BTC or other import incentives.
