WASHINGTON: Biodiesel and renewable diesel imports went down 36 percent last year, despite achieving record levels just the previous year, according to the U.S. Energy Information Administration. The EIA has identified two driving forces behind the decline.
Hesitation of proposed Renewable Fuel Standard (RFS) targets for 2015 and the lack of a surge of imports from Argentina late in the year have been considered by the EIA as reasons for the decline in 2014 volumes.
As defined by the EIA, RFS “requires EPA to set annual requirements for the renewable content of liquid fuels that may differ from a set of targets specified by law.”
Under the 2014 RFS projections, obligations for biomass-based diesel were expected to remain unchanged from 2013. However, advanced biofuels were projected to decrease to 2.2 billion gallons from 2.75 billion gallons the previous year.
Last year’s RFS targets proposal was released in November 2013. Targets for 2015 have yet to be released. Insecurities stemming from last year’s low projections and this year’s lack of projections have caused problems for refiners to meet RFS targets.
A major contributor to 2013’s record volumes was Argentina. In response to a European Union five-year tariff for selling biodiesel in the EU below cost, Argentina exported oil typically destined for Europe to the United States, according to Bloomberg. Argentine biodiesel imports fell 57 percent the following year.
In a late-January article in Bloomberg, biodiesel makers had issues with the Environmental Protection Agency allowing imports from Argentina. Complaints about imports came as the government failed to comply with laws that encourage domestic production.
Additionally, tax credits for biodiesel usage have been inconsistent. A $1 per gallon biodiesel tax credit expired at the end of 2013. The tax was not reinstated until the end of 2014. Higher prices kept the blending and production of domestic biodiesel economically feasible, thus reducing the need for imported fuels.
