MARKET DEVELOPMENT
US Biodiesel Imports in July Hit Year-to-Date High: Census Bureau
US Biodiesel Imports in July Hit Year-to-Date High: Census Bureau
05/09/2014 (Platts) - US biodiesel imports reached a 2014 year-to-date record in July of 69,474 mt, breaking the prior record -- set in March -- of 33,330 mt, according to US Census Bureau data released Thursday.
However, overall US biodiesel imports are still well below levels seen last year, when imports soared after the reinstatement of a $1/gal tax credit in 2013, which turned imports into a profitable business for blenders.
US biodiesel imports in the first seven months of 2014 amounted to 225,132 mt, down 28% from the same period last year.
The top origin for US biodiesel imports in July was Indonesia at 24,043 mt, up 60% from the previous month and the highest since December 2013 when 52,350 mt were imported.
Traders attributed the surge in imports from Indonesia to lower palm oil prices.
A couple of producers from Indonesia are already registered with the EPA and would be capable of generating RINs if they ran an approved feedstock. Although palm oil has not been approved as an eligible feedstock to generate RINs under RFS2, grandfathered biodiesel plants -- construction of which started prior to December 19, 2007 -- can assign RINs with a D6 code to palm oil-based biodiesel if they keep up with the appropriate documentation.
Also, for the first time this year, imports from Argentina were recorded at 18,217 mt. A massive 441,772 mt were imported from Argentina in 2013.
Latest line-up reports have shown two or three cargoes from Argentina heading to the US Gulf Coast. The latest one of 19,000 mt is coming on the Chembulk Adelaide due to load by mid-September.
"Imports from Argentina sounds like a gamble on the tax credit," said an US biodiesel traders.
The biodiesel blender's tax credit of $1/gal expired in December 31, 2013.
Back in April this year, the US Senate Finance Committee approved a measure that would retroactively restore and extend it through 2015, but it stalled. Market participants do not expect Congress to possibly revisit the proposal until after November midterm elections. Some market players appear confident the tax credit will be reinstated as offers of B99 are widely available, said sources.
However, overall US biodiesel imports are still well below levels seen last year, when imports soared after the reinstatement of a $1/gal tax credit in 2013, which turned imports into a profitable business for blenders.
US biodiesel imports in the first seven months of 2014 amounted to 225,132 mt, down 28% from the same period last year.
The top origin for US biodiesel imports in July was Indonesia at 24,043 mt, up 60% from the previous month and the highest since December 2013 when 52,350 mt were imported.
Traders attributed the surge in imports from Indonesia to lower palm oil prices.
A couple of producers from Indonesia are already registered with the EPA and would be capable of generating RINs if they ran an approved feedstock. Although palm oil has not been approved as an eligible feedstock to generate RINs under RFS2, grandfathered biodiesel plants -- construction of which started prior to December 19, 2007 -- can assign RINs with a D6 code to palm oil-based biodiesel if they keep up with the appropriate documentation.
Also, for the first time this year, imports from Argentina were recorded at 18,217 mt. A massive 441,772 mt were imported from Argentina in 2013.
Latest line-up reports have shown two or three cargoes from Argentina heading to the US Gulf Coast. The latest one of 19,000 mt is coming on the Chembulk Adelaide due to load by mid-September.
"Imports from Argentina sounds like a gamble on the tax credit," said an US biodiesel traders.
The biodiesel blender's tax credit of $1/gal expired in December 31, 2013.
Back in April this year, the US Senate Finance Committee approved a measure that would retroactively restore and extend it through 2015, but it stalled. Market participants do not expect Congress to possibly revisit the proposal until after November midterm elections. Some market players appear confident the tax credit will be reinstated as offers of B99 are widely available, said sources.