As President Joe Biden’s administration approaches its conclusion, American farmers are urging action against the surge of used cooking oil imports from China. They argue these imports threaten the farming community’s efforts to produce crops for low-carbon fuels, crucial for the industry’s growth.
Used cooking oil is essential for manufacturing green diesel and sustainable aviation fuel. Recent figures from the U.S. Department of Agriculture reveal that imports from China hit nearly one million metric tons in September, a record high. In contrast, other nations have implemented restrictions, leading to an influx of these imports into the U.S.
Biden’s significant climate legislation was seen as a boon for rural farmers, promising to provide incentives for new crops that would support clean technology and environmental goals. However, the legislation failed to limit these incentives to domestic producers, allowing for a wave of foreign imports instead.
This influx is hurting the very incentives that were meant to benefit farmers. They have been investing in crops like corn, camelina, and soybeans, expecting high demand driven by the Inflation Reduction Act. Yet, with the rules still pending and uncertainty over the law’s future under a possible Trump administration, farmers find themselves in a precarious position.
Ron Kindred, a farmer from Illinois and chair of the state’s soybean association, expressed his frustration: “This was supposed to be a major win for us, and now we’re losing.” He highlighted ongoing low prices for soybeans as an additional challenge, with futures down nearly 14 percent this year.
Soybean oil is a key ingredient in many biofuels, including biodiesel. The oil is processed and converted into fuel through chemical reactions. According to Rystad Energy, U.S. production of plant-based fuels is predicted to rise significantly in the coming years, with an increase of 53 percent to 1.3 million barrels of oil equivalent per day over the next decade.
However, the newly introduced tax credits starting in January do not mandate that the feedstocks come from U.S. sources, inadvertently favoring cheaper, imported alternatives. As a result, the reliance on Chinese imports has dramatically increased, accounting for over half of the U.S. used cooking oil imports this year.
Anne Schwagerl, a longtime farmer and vice president of the Minnesota Farmers Union, emphasized the need for protections for family farms, stating, “Having our market flooded with imported used cooking oil is a genuine threat to rural economic health.”
In response to these concerns, agricultural organizations have called for measures in the final regulations to restrict tax credits to American-grown crops. Recently, a bipartisan coalition of lawmakers introduced bills aimed at confining the tax credit to domestically sourced feedstocks while extending eligibility for another decade.
A representative from the soybean oil industry noted, “Generally, we assume taxpayer funding is meant to support American industries. Importing used cooking oil essentially undermines our domestic agricultural products.”
This issue has drawn comparisons to the European Union, which imposed anti-dumping duties on Chinese used cooking oil imports due to similar concerns about domestic industry harm.
There are also apprehensions regarding the quality of imported oils, particularly concerns about the presence of virgin palm oil, associated with deforestation. The U.S. Environmental Protection Agency is currently auditing both domestic and imported feedstocks to address these concerns.
Meanwhile, biofuel producers point out that restricting domestic feedstock could hinder the industry’s growth and efficiency in transitioning to greener fuels. Bruce Fleming, CEO of a sustainable aviation fuel company, advised against favoring one type of feedstock over another.
Farmers continue to face uncertainty, with tax credits commencing in January but final guidance yet to be communicated. Although the Treasury Department indicated ongoing progress, no specific release date has been provided. With the possibility of changes under a new administration, many farmers fear they could miss out on potential tax benefits.
Geoff Cooper, president of the Renewable Fuels Association, warned, “If farmers don’t receive clarity soon, 2025 could become a lost opportunity.”