What’s Ahead in the FOG Markets?
Rising Tide – What’s Ahead in the FOG Markets Ryan Standard, Fastmarkets / The Jacobsen The following video is a capture from The Jacobsen Fuels & Feedstocks Virtual Conference...
Biodiesel and renewable diesel imports continue to enter the U.S. market at a rapid pace. 2015 Biomass-based diesel imports through August are already 96% of full year 2014 imports and ahead of the 2013 import pace that saw 342.4 million gallons imported. However, imports in 2013 accelerated greatly over the final four months of the year, likely taking advantage of the expiring tax credit at the time.The most active biodiesel import activity originates from Argentina and Indonesia.
In 2012, Argentina and Indonesia were the two biggest exporters of biodiesel to the European Union. They were responsible for roughly 90% of all biodiesel imports to the EU. As of August 31st, Argentina and Indonesia account for 72% of all Biomass-based diesel imported to the United States. During 2012, the EU accused Argentina and Indonesia of dumping their biodiesel in the EU market at below market prices. During 2013, anti-dumping duties for biodiesel were imposed on Argentina and Indonesia. The duties severely limited the imports from these countries.
It should be no surprise that both Argentina and Indonesia turned their sights on the U.S. market. Prior to 2013 there were no imports received from either Argentina or Indonesia into the U.S. Market. Since then their combined imports have been increasing. In 2013 they accounted for 54% of imports. In 2014, 57%; and in 2014 their total has jumped to 72%.
Of course biodiesel imports are only part of the equation, let’s not forget renewable diesel. Renewable diesel imports did not really begin until 2013, and since that time,Singapore has dominated the market accounting for 79% of imports in 2013, 92% in 2014, and 100% in 2015. Renewable diesel imports have found a strong home in the California market, where they are able to take advantage of both RIN and LCFS credits, not to mention the $1 per gallon blenders tax credit when it is in play.
Moving away from the export comparison and looking at total U.S. biodiesel/renewable diesel production accounted for in 2015, it is evident that the U.S. is importing a significant amount of the potential 2015 RVO. According to the EPA, total D4 gallons were 1.175 billion gallons through August. Renewable imports accounted for 10.67% of the total, while biodiesel gallons were 15.68%. Overall, biodiesel and renewable diesel imports account for 26.34% of total D4 production through August.