The global biodiesel industry faces significant disruption following President Donald Trump’s recent declaration of a US economic emergency and implementation of sweeping tariff measures. These developments are creating ripple effects throughout renewable fuel supply chains, particularly impacting Used Cooking Oil (UCO) and Fatty Acid Methyl Ester (FAME) markets.

New tariff structure reshaping biodiesel trade

President Trump’s administration has introduced tariffs of at least 10% across all countries, with substantially higher rates—up to 54%—targeting 60 countries or trading blocs that maintain significant trade deficits with the United States. This policy shift represents a major restructuring of global biodiesel trade dynamics.

Chinese UCO imports face uncertainty

One of the most immediate impacts concerns Chinese UCO imports to the US market. With annual imports reaching approximately 2.5 million metric tons, these shipments now face prohibitive 54% tariffs. Industry analysts suggest this could dramatically reduce the competitiveness of Chinese UCO in American markets.

Brazilian alternatives gain advantage

As markets adjust to these new realities, Brazilian tallow may emerge as a more attractive alternative for US biofuel producers. With Brazil facing only the baseline 10% tariff, its position in the renewable fuels supply chain could strengthen considerably compared to more heavily taxed competitors.

HVO and SAF status under investigation

While UCO and traditional biodiesel products appear to be subject to these new tariffs, the situation remains fluid for Hydrotreated Vegetable Oil (HVO) and Sustainable Aviation Fuel (SAF). Industry experts are currently investigating the Harmonized System (HS) codes for these products to determine their classification under the new tariff regime.

Market response

The biodiesel industry is currently in assessment mode, with stakeholders analyzing potential supply chain restructuring and price implications. These developments come at a critical time as renewable fuel mandates continue to expand globally, creating additional complexity for market participants.

For comprehensive analysis and detailed insights into how these tariff changes will affect specific biodiesel feedstocks, production costs, and market opportunities, please refer to Vesper’s complete Biodiesel Market Report for Week 14: https://app.vespertool.com/market-analysis/1836?commodity=vegetable-oil