U.S. Introduces Green Fuel Rule to Restrict Used Cooking Oil Imports

The United States is taking steps to restrict imports of waste cooking oil to prevent lucrative tax credits for foreign supplies used to produce biofuels.

In the long-awaited guidance, the U.S. Department of the Treasury said that fuels produced using foreign-sourced supplies will not be allowed under the so-called GREET model, a tool used by the U.S. Department of Energy to determine the total amount of greenhouse gases emitted by the transportation and energy sectors.

This comes after large quantities of soybeans from China arrived in the U.S. at a lower price than U.S.-based soybean oil. The decision is a victory for U.S. farmers, who have been counting on a boom in soybean biofuels like renewable diesel to sell their crops.

Over the past year, the issue of foreign used cooking oil (UCO) has become a growing focus for agricultural groups and lawmakers. Growers have watched as soybean prices have plummeted, angered by the influx of UCO from Asia into the U.S. for use in the production of fuels such as renewable diesel and SAF. Fuel made from UCO is highly prized in low-carbon fuel markets like California because of its relatively small carbon footprint.

Regulations issued Friday by the U.S. Treasury Department allow for a 45Z tax credit for the production of UCO-using fuels in the U.S. The policy provides manufacturers of so-called clean transportation fuels with a per-gallon or gallon-equivalent tax credit based on the carbon intensity of their production.