Governors' Biofuels Coalition

Meanwhile, sugarcane ethanol imports from Brazil posted a 40% decline from 2012 to 242 million gallons, EIA said. Export volumes of corn-based ethanol to Brazil declined.

The change in biodiesel and renewable diesel imports was driven by growth in domestic biodiesel demand to satisfy renewable fuels targets, and increased access to biodiesel from other countries, according to an EIA update.

On the ethanol side, growing corn harvests and limited growth in the domestic ethanol market led the U.S. to become a net exporter of ethanol and the world’s leading supplier. At the same time, decreased sugarcane harvests in Brazil led to significant reductions in Brazilian ethanol output and a reversal in traditional ethanol trade patterns, as U.S. volumes began entering Brazil to meet domestic demand.

Biodiesel and renewable diesel’s import increase
The strongest driver of the resurgence in U.S. biomass-based diesel demand, EIA says, was the increasing Renewable Fuel Standard target.

A few other factors also impact demand for biomass-based diesel fuels – they have a higher energy content compared with ethanol, generating more Renewable Identification Number credits per gallon of fuel produced. In addition, renewable diesel meets the same American Society for Testing and Materials standards as petroleum diesel, and is thus not subject to the blending limits imposed on biodiesel.

Related: Study Quantifies Ethanol’s Impact on Job Creation, National GDP

Biomass-based diesel fuels also qualify for the California Low Carbon Fuel Standard, which mandates a reduction the carbon content of gasoline and diesel fuels through 2020.

Fuels with low CI values generate credits for fuel providers that can offset any deficits that they accumulate from fuels with higher CI values, EIA says. Depending on the feedstock and the method of production, both biodiesel and renewable diesel have some of the lowest CI values among eligible fuels, and thus are valuable fuels for meeting LCFS targets.

Given the elimination of the tax credit, soybean feedstock constraints, and limited renewable biodiesel production capacity, EIA projects that U.S. imports of biomass-based diesel fuels are likely to continue to play an important role in meeting the LCFS and the RFS targets going forward.

Ethanol’s import decline
Brazil continues to supply sugarcane ethanol to the U.S. to meet RFS volumes and LCFS requirements, EIA said, though U.S. imports of ethanol from Brazil fell by 95% compared with the fourth quarter of 2012.

A key driver of the decline was the U.S. Environmental Protection Agency’s announcement of proposed reductions to 2014 RFS, as well as growing volumes of biomass-based diesel imports, EIA said.

The trend in 2014 is for the United States to remain a strong net exporter of ethanol, with the potential for substantially larger levels of exports, given the recent abundant corn crop and EPA’s proposed reduction in domestic RFS targets.

While favorable blending economics are likely to drive domestic ethanol demand, the United States is likely to remain the world’s leading ethanol supplier. U.S. ethanol import volumes in 2014 will likely be contingent on a combination of Brazilian sugarcane yields, final advanced biofuels RFS targets, and imported volumes of competing advanced biofuels, such as renewable diesel.