US Biomass Diesel Imports Down in 2014

STREATOR, Ill. (DTN) -- U.S. imports of biomass-based diesel fuel tumbled 36% in 2014 from 2013 to 333 million gallons, the Energy Information Administration reported Friday, March 20, with 64% of those imports biodiesel.

Biomass-based diesel fuel refers to biodiesel and renewable diesel, with 212 million gallons of biodiesel imported into the United States in 2014. Canada was the top supplier, accounting for 47% of the biodiesel imports, reclaiming its spot as the top U.S. supplier after being surpassed by Argentina in 2013. The remaining volume of biodiesel imports were primarily supplied from Indonesia and Argentina and received along the U.S. East Coast.

Renewable diesel accounted for the balance of biomass-based diesel imports into the United States in 2014 at 121 million gallons, which was down 42% from 2013. More than 92% of this total originated from Singapore, primarily received at West Coast ports, and likely destined to California for compliance with the state's Low Carbon Fuel Standard.

EIA said the annual decline in the import rate was due to uncertainty surrounding future Renewable Fuel Standard targets, which mandate renewable fuel demand in the United States, and the absence of a late-year influx of volumes from Argentina.

While the RFS is meant to encourage the production and consumption of renewable fuels, obligations for 2014 still have not been finalized and those for 2015 have not yet been proposed, with the uncertainty limiting demand for biomass-based diesel.

In November 2013, the EPA proposed a 1.28 billion gallon mandate for biomass-based diesel, which falls under the D4 nested category under the RFS, for 2014, unchanged from 2013's mandate. EPA also proposed lowering the advanced biofuels obligation, nested category D5, to 2.2 billion gallons in 2014 from 2.75 billion gallons in 2013. As with the D4 category, each gallon of biomass-based diesel generates 1.5 D5 RINs.

The proposal for 2014 was never finalized, and the RFS target for this year never promulgated, creating uncertainty on how much supply would be needed to satisfy the federal mandate.

"The uncertainty and proposed lower target levels have made it difficult for refiners to comply with the RFS recently, but the flexibility and value of biomass-based diesel volumes towards all obligation levels make it a strong driver of biodiesel consumption as long as the RFS is still active," EIA said.

Two other factors also explain why 2014 imports dropped from 2013 said EIA.

"In late 2013, there was a surge of biodiesel imports from Argentina as a result of European Union antidumping duties placed on Argentine biodiesel," said EIA. "This action by the EU temporarily diverted large volumes of Argentine biomass-based diesel that were previously destined to be exported to Europe to the U.S."

U.S. imports of biodiesel from Argentina tumbled 57% from 2013 to 52 million gallons in 2014.

EIA said another factor for the decline in imports was the expiration of the biodiesel tax credit at the end of 2013, which paid $1 gallon for blending biodiesel or renewable diesel into petroleum-based fuel. The credit was retroactively restored at the end of 2014.

Relatively high diesel fuel prices for much of 2014 kept domestic biodiesel relatively economic to blend said EIA, supporting production at levels near those in 2013. The production was sufficient to meet most of the proposed reduced RFS obligations in 2014, thus reducing the need for imports.

Both biodiesel and renewable diesel fuels are produced from refining vegetable oils or animal fats. Biodiesel is blended with petroleum diesel up to 5% or 20% by volume, referred to as B5 and B20, respectively. Renewable diesel is a diesel-like fuel that meets specifications for use in existing infrastructure and diesel engines, and thus is not subject to any blending limitations.

(BM/AG)

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