Big changes afoot in US trade of biobased diesel

A big shift is occurring in U.S. trade of biobased diesel so far this year, according to the latest import and export numbers released by the U.S. Energy Information Administration. Renewable diesel imports are down, biodiesel imports and exports are up, and Singapore is rivaling Canada as the top destination for U.S. biodiesel.

Total U.S. biodiesel exports in the first half of this year approached 160 million gallons, up substantially from just over 98 million gallons for the first six months of 2021. Outside of a few large shipments of U.S. biodiesel to Singapore late last year totaling close to 7 million gallons, U.S. biodiesel exports to the Southeast Asia city-state have been historically nonexistent or negligible at most. This is no longer the case.

For the first five months of this year, U.S. biodiesel exports to Singapore surpassed those to Canada, the longstanding top export destination market for U.S. biodiesel. From January through May, the U.S. shipped more than 55.5 million gallons of biodiesel to Singapore, while in the same time period Canada took receipt of approximately 54.5 million gallons—1 million gallons less than Singapore. In January alone, more than 39 million gallons of U.S. biodiesel was sent to Singapore while only about 7 million gallons was exported to Canada.

Singapore is the world’s largest bunkering hub. The rise in U.S. biodiesel exports to Singapore coincides with a significant uptick in marine biofuel trials in which shipping companies are fueling vessels with biofuels like biodiesel in B20 and B30 blends to meet corporate, industry and governmental decarbonization goals. A recent unified interpretation approved by the International Maritime Organization’s Marine Environment Committee on the application of regulation 18.3 MARPOL Annex VI removes regulatory hurdles related to biofuel use in oceangoing vessels and is expected to facilitate even greater use of marine biofuel.

Also, in October 2021, around the same time larger shipments of U.S. biodiesel began moving to Singapore, marine biofuel supplier GoodFuels announced a long-term agreement with Renewable Energy Group, North America’s largest biodiesel producer, for development and supply of marine biofuel. Early this year, GoodFuels announced it had opened a Singapore office to serve demand for marine biofuel in the Asia-Pacific region.

Biobased Diesel Daily inquired with REG—now Chevron REG after its acquisition by the oil giant—as to whether its U.S.-made biodiesel is being exported to Singapore. A spokesperson for the company said Chevron REG “would not comment or share any information on trade-related data.”

With EIA releasing June’s trade figures Aug. 31, however, Canada resumes the top destination for U.S. biodiesel for the first half of this year. U.S. biodiesel exports to Singapore from January through June of this year totaled 63.7 million gallons while exports to Canada in the same time frame topped out at 74.7 million gallons.

Peru and the Netherlands were also notable export markets for U.S. biodiesel from January through June 2022, with Peru receiving more than 12 million gallons and the Netherlands 8.6 million gallons.

Overall, U.S. biodiesel imports are also up in the first half of 2022 compared to the same time period last year. The U.S. imported more than 104 million gallons of biodiesel from January through June of this year compared to 88.8 million gallons during the first half of 2021.

Most of the biodiesel entering the U.S. from January through June of this year came from Canada (43.5 million gallons), Germany (32.9 million gallons), Spain (18.2 million gallons), Italy (4.9 million gallons) and South Korea (4.6 million gallons).

The volume of biodiesel coming to the U.S. from Germany is up significantly from last year. In all of 2021, Germany shipped just over 27 million gallons to the U.S. In just the first half of 2022, the U.S. has received nearly 33 million gallons from Germany.

U.S. imports of renewable diesel are down considerably in the first half of this year compared to the same time period as 2021.

Last year, the six-month total of U.S. renewable diesel imports approached 226 million gallons. This year, for the same time period of January through June, that total is down by 42 percent at just over 131 million gallons.

The overwhelming majority of U.S. renewable diesel imports in the first half of 2022 arrived from Singapore, where Neste has a large renewable diesel facility, save 2 million gallons shipped from the Netherlands, where Neste has another renewable diesel plant. The Singapore refinery is undergoing a large, ongoing expansion project, and Neste would not disclose output from the facility from January through June of this year.

The downturn in U.S. renewable diesel imports coincides with a recent growth spurt in domestic renewable diesel production capacity, including a major expansion at Diamond Green Diesel in Norco, Louisiana, being completed late last year; Phillips 66 hitting its full-run rate last summer in Rodeo, California; HF Sinclair’s Cheyenne, Wyoming, unit coming online early this year and its Artesia, New Mexico, plant starting up as well; CVR Energy beginning renewable diesel production in Wynnewood, Oklahoma, this year; and Marathon hitting design capacity in Dickinson, North Dakota, last summer.