U.S. imports of biodiesel and renewable diesel fell sharply in the first half of 2025, reaching their lowest levels in more than a decade. The decline comes after changes to federal tax credits and reduced domestic consumption of the fuels, reports EIA.
Government data show that biodiesel imports averaged just 2,000 barrels per day (b/d) between January and June 2025, compared with 35,000 b/d in the same period last year. Renewable diesel imports also dropped, averaging 5,000 b/d compared with 33,000 b/d in the first half of 2024.
The steep decline follows the end of the $1-per-gallon blender’s tax credit, which previously applied to both domestic and imported fuels. From January 2025, the Inflation Reduction Act replaced the credit with the Section 45Z Clean Fuel Production Credit, which is limited to U.S.-produced biofuels. The change left imported products at a disadvantage.
Falling demand added further pressure. U.S. consumption of renewable diesel fell by about 30% in early 2025 compared with a year earlier, while biodiesel use dropped by around 40%. Analysts point to weak blending margins and uncertainty around regulatory requirements.
As a result, domestic blenders turned to U.S.-produced fuels for the limited amounts being used. Neste, the sole supplier of renewable diesel imports to the U.S., reported sending a smaller share of its output to the country this year.
Consumption of biodiesel and renewable diesel is expected to pick up later in 2025 to meet Renewable Fuel Standard (RFS) obligations. However, imports are likely to remain low because of the tax policy changes. Forecasts suggest that U.S. net biodiesel imports in 2025 and 2026 will be the lowest since 2012.
