US Imports 2nd-Highest Volume of Biobased Diesel in History Last Year, Exports Hit 15-Year High

by Ron Kotrba (Biobased Diesel Daiy) The U.S. imported more than 863 million gallons of biobased diesel in 2023, the second-highest volume of combined biodiesel and renewable diesel imports on record, according to data from the U.S. Energy Information Administration compiled and analyzed by Biobased Diesel Daily®.

While the combined U.S. import-volume totals of biobased diesel fall short of the high-water mark of nearly 932 million gallons in 2016—the year that led the National Biodiesel Board (now Clean Fuels Alliance America) to file trade complaints against Argentina and Indonesia, which ultimately led to tariffs on biodiesel from those two countries—2023 was certainly a notable year for U.S. biobased diesel trade in many respects.

U.S. imports of methyl ester biodiesel last year surpassed half a billion gallons, coming in at just over 501 million gallons.

This was by far the second-highest volume of U.S. biodiesel imports on record, with more than 100 million gallons between second and third.

The highest volume came in 2016 when more than 700 million gallons of foreign-made biodiesel entered the U.S.

Germany was the No. 1 source of foreign biodiesel shipped to the U.S. in 2023, coming in at 174.7 million gallons.

In second place was Canada, which sent slightly more than 140 million gallons to the U.S. last year.

Spain makes a surprise third-place showing, shipping nearly 84.5 million gallons of biodiesel to the U.S. in 2023.

Rounding out the Top 5, South Korea shipped just over 33 million gallons of biodiesel to the U.S. in 2023.

Additional volumes came from Belgium (11.4 million gallons), Brazil (nearly 8.9 million gallons)—the first year the U.S. received biodiesel imports from that country)—Malaysia (more than 2.1 million gallons), and the Netherlands (more than 1.5 million gallons).

The increased volumes from Europe and decreased share from Canada appear to be representative of changing biodiesel policy and feedstock landscapes in those two regions.

What is also important to keep in mind is that after 2024, imports will no longer be eligible for the federal tax credit.

In addition, the federal tax credit—a major driver in the growth of the U.S. biobased diesel market since the mid-2000s—will no longer be $1 per gallon, per se, as it changes from a blenders credit to a domestic production credit based on greenhouse-gas reductions.

It is interesting to note, however, that as the U.S. witnesses near-record imports, some U.S. biodiesel producers large and small are shutting down plants based on tough market conditions (e.g., Chevron REG’s Ralston, Iowa, and DeForest, Wisconsin, plants; New Leaf Biofuel in San Diego, California; etc.)....

This was a near-record annual volume of U.S. renewable diesel imports second only to 2021 when more than 392 million gallons of renewable diesel entered the U.S.

A vast majority of this came from Singapore with far less volumes coming from the Netherlands and Finland. Neste has manufacturing facilities in all three areas.

Of particular note is in May 2023, the U.S. imported its highest monthly volume of renewable diesel on record going back to 2012.

The continued near-record annual and May’s all-time record-setting monthly imports of renewable diesel are noteworthy considering conventional thought has been that as U.S. domestic manufacturing of renewable diesel mushrooms, imports could wane. This may still play out in long-term trends.

It is important to note, however, EIA data does not show any U.S. exports of renewable diesel—but that doesn’t mean they don’t exist....“Based on the record number of D4 RINs retired for exports in 2023—881 million—there had to have been a substantial number of gallons of renewable diesel exported last year.”...

The U.S. exported more than 251 million gallons of biodiesel in 2023, the highest volume on record back to the late 2000s.

EIA’s monthly figures do not go back further than 2011, but in 2008—more than 15 years ago—the U.S. exported 700 million gallons of biodiesel.

Interestingly, according to EIA annual data, the U.S. exported more in 2008 than the country even produced that year.

This was before the “splash-and-dash” loophole was closed, at a time when Europe was the prime destination for U.S. biodiesel and before the second iteration of the federal Renewable Fuel Standard was implemented.

At the height of the “splash-and-dash” period for the $1-per-gallon blenders tax credit, ships loaded with foreign-made biodiesel could dock in a U.S. port, drop a nominal volume of petroleum diesel in a B100-filled vessel making B99.9 to claim the tax credit, and then depart for other countries where biodiesel subsidized by American taxpayers would be consumed.