ResourceWise recently held a webinar featuring Mat Stone, our Vice President of Low Carbon Fuels. He shared his expertise and vital knowledge of the market, highlighting key areas to look for both in short- and long-term strategizing.
In this post, we'll share the top 5 questions and answers you need to know to navigate the current and future biofuels and feedstocks landscape.
In short, yes. The US was already consuming a significant amount of biofuel over the last year. Accordingly, some imports headed to other destinations could be diverted back to the US.
Perhaps a bigger question related to this one concerns the feedstocks used to produce biofuels. While US production can certainly increase, what about feedstocks used to power those biofuels? How and where will the feedstocks become available?
As Mat Stone discussed in the webinar, "That's as much a legislative issue as a market one." Legislation will provide pathways and incentives for feedstocks that the market will adopt based on need. The only way to continue power production increases is by concurrently expanding feedstock production.
Currently, the US biofuels market is somewhat stretched. Year-over-year, early-year biofuel blending is down 30% from 2024. To compound the matter, soybean oil stocks are also low.
Two things will likely need to occur with a renewed demand and production ramp-up. First, exports will need to come back into the US market. Second, additional sources of domestic feedstock supply must be identified and unlocked.
There has been ongoing speculation around the return of the $1-per-gallon blender's tax credit (BTC), a program that would significantly boost US biofuel producers. However, momentum behind reviving the BTC has slowed in recent months, and no concrete action has been taken.
In the meantime, attention is shifting toward the Section 45Z tax credit set to become the primary financial incentive for low-carbon fuel producers in the US. Unlike the BTC, the 45Z credit is more nuanced. Payout levels are based on feedstock carbon intensity. Current projections suggest producers using grease feedstocks may receive around 60 to 65 cents per gallon.
Furthermore, the carbon intensity scoring (CI) structure under 45Z is expected to undergo some changes. Most significantly, the ILUC (indirect land-use change) penalties for soybean oil were removed. This could improve the economic outlook for soy-based fuels, which have historically been penalized under earlier scoring systems.
Not all producers may benefit equally, however. Proposed rules include a 20% reduction on imported feedstocks. This could erode the competitiveness of overseas suppliers.
If finalized, these changes will likely reshape domestic production economics in the US. They will also impact the flow of global feedstock trade into the US biofuels market.
China is increasingly pivoting toward sustainable aviation fuel (SAF) as a strategic response to Europe's restrictions on biodiesel imports in the wake of its anti-dumping ruling. With fewer avenues to export traditional biodiesel, Chinese producers are shifting capacity toward SAF—fuel that still has access to European markets.
Related: EU Anti-Dumping Ruling on China Marks Serious Shift in Biofuels Market
As a result, SAF outflows from China are rising, placing downward pressure on European SAF prices. This trend underscores China's growing role not just as a producer, but also as a price influencer in global low-carbon fuels.
Meanwhile, Asia is emerging as a biofuels consumption hub more broadly. Several countries across the region are rolling out new mandates, and there's especially strong growth in marine biofuel blending for shipping. This sector is quickly gaining attention in decarbonization strategies.
On the policy front, one open question is how US–China relations might impact trade in feedstocks and low-carbon fuels. While a fully negotiated free trade agreement (FTA) between the US and China could take years, some provisional arrangement could still unlock trade flows.
According to Mat Stone, "It all depends on how the US government chooses to define the relationship—and who they want to benefit politically."
As Stone continued during the webinar, a sudden or abrupt jump in mandate requirements would not make much economic or practical sense. However, governmental delays and processes often lead to this very pitfall:
"I do believe there should be a ramp-up. Jumping from 2% to 6% overnight isn't sensible. But governments tend to delay action, then confront a cliff edge. So while a stepped structure makes more sense for supply planning and investment, that's not what's written into law right now."
As Mat Stone succinctly said, "Yes—we’re seeing money move back into the sector. M&A (mergers and acquisitions) and JV (joint ventures) activity is picking up. There’s excitement around advanced biofuels and momentum for investment over the next five years. The cycle appears to be turning again."
All of these questions come from our recent webinar, Biofuels 2025: Foundation for Growth.
Join ResourceWise's Mat Stone in this on-demand webinar as he unpacks the shifting landscape of renewable fuels. This includes short-term fluctuations and to medium-term drivers to long-term trends that will define the sector's trajectory.
What you'll learn:
Whether navigating price volatility or exploring where new investments are headed, this session delivers the strategic context you need. Register today for instant on-demand access.