Biomass-based diesel imports rose 26% in 2019

by Talk Business & Politics staff ([email protected]) 428 views 

U.S. imports of biomass-based diesel, which include biodiesel and renewable diesel, increased 26% to more than 27,000 barrels per day in 2019, following three years of decline, according to the U.S. Energy Information Administration (EIA).

The rise could be attributed to the increase in renewable diesel imports from Singapore.

Biodiesel is a mixture of chemical compounds known as alkyl esters and is often combined with petroleum diesel in blends of 5% to 20%, or B5 to B20. Renewable diesel comprises hydrocarbon chains that are indistinguishable from petroleum diesel and can be used in existing infrastructure and diesel engines without blending restrictions. Biodiesel and renewable diesel are produced from fats, oils and grease.

Biomass-based diesel is typically more expensive to produce than petroleum diesel, and the consumption of biomass-based diesel is driven by federal and state policies. Biomass-based diesel qualifies as an advanced biofuel under the U.S. Environmental Protection Agency’s Renewable Fuel Standard program, which requires renewable fuels to be blended into the fuel supply. Biomass-based diesel also generates credits under California’s Low Carbon Fuel Standards and is used to meet those fuel standards by reducing greenhouse gases.

In 2019, most biomass-based diesel imports comprised renewable diesel imports, which have exclusively come from Singapore since 2015. Renewable diesel imports rose 49% to a record of nearly 17,000 barrels per day in 2019. Since 2016, all U.S. renewable diesel imports have entered the United States in California. This is likely for compliance with the state’s fuel standards as renewable diesel has one of the lowest carbon intensities as a means to meet the standards, according to the EIA.

The majority of biodiesel imports came from Canada in 2019, totaling 5,100 barrels per day. The remainder came from European countries. Biodiesel has been imported from Canada to garner U.S. tax incentives and to contribute to U.S. renewable fuel programs.

The rising targets in the Renewable Fuel Standards program have contributed to increased demand for biomass-based diesel in recent years. However, total imports had been falling as a result of decreases in imports from Argentina and Indonesia since 2017, the year the United States imposed import tariffs of biomass-based diesel imports from those two countries. The two countries didn’t export any biodiesel to the United States in 2018 or 2019. U.S. biodiesel imports were flat at more than 11,000 barrels per day in 2019, from 2018.

U.S. biodiesel exports rose 10% to 7,400 barrels per day in 2019, from 2018. Canada received nearly 90% of the exports. The majority of the exports were produced in the Midwest, where most of the U.S. biodiesel production capacity is located. The United States exported about 1,500 more barrels per day to Canada than it imported.

Net imports of biomass-based diesel are expected to rise by 25% in 2020 and by 56% in 2021, according to the EIA. U.S. biodiesel production in 2020 should be similar to 2019 levels.