Renewable Diesel Drove Growth in 2019 Biomass-based Imports
OAKHURST, N.J. (DTN) --- U.S. imports of biomass-based diesel, which include
biodiesel and renewable diesel, grew 26% in 2019 to more than 27,000 bpd,
reversing three years of decline, driven by the increase in renewable diesel
imports from Singapore, the Energy Information Administration reported in the
latest Today in Energy brief.
The majority of biomass-based diesel imports in 2019 came from renewable
diesel imports, which have been sourced exclusively from Singapore since 2015,
and rose 49% to a record of nearly 17,000 bpd in 2019. Since 2016, all U.S.
renewable diesel imports have entered the country in California, mostly likely
for compliance with the state's Low Carbon Fuel Standard because renewable
diesel has one of the lowest carbon intensities of the approved pathways for
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 is composed of hydrocarbon chains that are indistinguishable
from petroleum diesel, meaning that it meets specifications for use in existing
infrastructure and diesel engines and is not subject to any blending
limitations. Biodiesel and renewable diesel are produced from a variety of
fats, oils and grease, collectively referred to as FOGs.
Because biomass-based diesel typically costs more to produce than petroleum
diesel, federal and state policies largely drive consumption of biomass-based
diesel. At the federal level, 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
nation's fuel supply. Biomass-based diesel also generates credits under
Calif.'s LCFS and is increasingly used to meet the expanding fuel standards in
the LCFS because of its favorable greenhouse gas reduction score.
Biodiesel imports from Canada accounted for most of the U.S. imports in
2019, totaling 5,100 bpd, with the remainder coming from European countries.
Biodiesel from Canada has regularly been imported into the U.S. to capture U.S.
tax incentives and contribute toward U.S. renewable fuel programs.
Although increasing RFS targets have driven biomass-based diesel demand in
recent years, total imports have fallen because of decreases in imports from
Argentina and Indonesia since 2017, the year the U.S. imposed import duties on
biomass-based diesel imports from those two countries. Neither Argentina nor
Indonesia exported any biodiesel to the United States in 2018 or 2019. Overall,
U.S. imports of biodiesel totaled more than 11,000 bpd in 2019, about the same
as 2018 levels.
The U.S. also produces and exports biodiesel, and Canada is a key trading
partner. U.S. exports of biodiesel totaled 7,400 bpd in 2019, an increase of
10% from 2018. Canada received nearly 90% of the U.S. exports of biodiesel,
much of which was produced in the Midwest, where most U.S. biodiesel production
capacity exists. In 2019, the U.S. exported more biodiesel to Canada than it
imported by approximately 1,500 bpd.
In its May Short-term Energy Outlook, EIA forecast continued growth in
renewable diesel imports into Calif., will lead to increased volumes of total
biomass-based diesel imports, with net imports increasing by an estimated 25%
in 2020 and by 56% in 2021. EIA expects domestic biodiesel production volumes
in 2020 will be similar to those in 2019.
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