Soybean oil demand for biobased diesel faces challenges from rising uco and tallow imports: Cobank report
In June, soybean oil usage for biobased diesel production hit near-record levels, but demand is now challenged by rising imports of used cooking oil (UCO) and tallow, which constitute about one-sixth of U.S. biodiesel and renewable diesel production. Most of these imports come from China and Brazil. With the upcoming 45Z Clean Fuel Production Credit, domestic producers are pushing for only U.S.-sourced feedstocks to qualify, though this may provoke trade retaliation concerns among officials.
Soybean oil usage for biobased diesel production reached nearly a record high in June, but demand for soybean oil feedstock is facing challenges due to rising imports of used cooking oil (UCO) and tallow, according to CoBank’s latest Quarterly Research Report, released on October 10.
The report reveals that UCO and tallow imports now represent about 1 in 6 gallons of U.S.-produced biodiesel and renewable diesel, with most of these imports coming from China and Brazil.
CoBank also notes that the U.S. EPA is investigating the authenticity of UCO imports from China. As the 45Z Clean Fuel Production Credit is set to take effect at the end of the year, domestic producers are urging lawmakers to ensure that only fuel made from domestically sourced feedstocks qualifies for the credit. However, the report cites concerns from administration officials who warn that such feedstock restrictions could lead to trade retaliation.
Recommended for you
