U.S. consumers used more biodiesel than ever before in 2015, but increasing imports are a concern for the young industry.
U.S. consumers used nearly 2.1 billion gallons of biodiesel in 2015, but domestic production remained flat at about 1.42 billion gallons, compared with about 1.47 billion gallons in 2014 and 1.5 billion gallons in 2013. Imports rose from 510 million gallons in 2014 to an estimated 670 million gallons in 2015, a 25 percent increase.
“While the overall numbers are positive, we are increasingly seeing subsidized, predatory imports undercutting U.S. production – in part by taking advantage of U.S. policies aimed at building up the domestic industry,” said Joe Jobe, CEO of the National Biodiesel Board. “This is exactly what we have been warning would happen, and it will continue until we take steps to level the playing field, including by reforming the biodiesel tax incentive as a domestic production credit.”
The National Biodiesel Board wants Congress to change the $1-per-gallon biodiesel tax incentive to a producer’s credit from a blender’s credit. Under the existing blender’s credit, biodiesel that is produced overseas and blended in the United States is taking advantage of the incentive.
“We welcome competition, but U.S. companies can’t fairly compete against foreign companies that are double-dipping on overseas and U.S. incentives while not letting U.S. producers compete in their domestic markets,” Jobe said. “This reform is a simple fix that would appropriately focus U.S. tax dollars on creating jobs and stimulating economic development here at home instead of overseas.”?
Jobe said the domestic biodiesel industry is optimistic because of stronger policies implemented late last year. In November, the EPA finalized the new biomass-based diesel standards under the Renewable Fuels Standard, the federal policy requiring renewable fuels to be incorporated into the U.S. fuel supply. The standard requires 1.9 billion gallons of biomass-based diesel in 2016 and 2 billion gallons in 2017. In December, Congress reinstated the biodiesel blender’s tax incentive through the end of the year. It had lapsed in 2015.
Biodiesel is a renewable, clean-burning diesel replacement used in existing diesel engines that is made from ingredients including recycled cooking oil, soybean oil and animal fats. It is the first and only commercial-scale fuel produced across the U.S. to meet the EPA’s definition as an Advanced Biofuel - meaning the EPA has determined that it reduces greenhouse gas emissions by more than 50 percent when compared with petroleum diesel. The EPA estimates last year’s biodiesel consumption reduced U.S. carbon emissions by at least 18.2 million metric tons.
Source: National Biodiesel Board