U.S. biofuel policy stagnation leads to slower soybean purchases

Due to the lack of guidance on new clean fuel tax credits, biofuel producers have postponed their soybean oil purchase plans for early next year. According to insiders, this has dampened demand for soybeans, prompting major agricultural commodity traders to also scale back purchases. Soybean oil is one of the top ingredients used to produce various renewable fuels, such as green diesel and jet fuel. David Fialkov, Executive Vice President of Government Affairs at NATSO, said that, as of mid-October, most fuel retailers had procured only about 10% of their biodiesel feedstock needed for the upcoming first quarter—compared to over 80% at this time during the past decade. "No one is producing, no one is buying, no one is blending," Fialkov said. The industry is awaiting guidance from the U.S. Treasury Department on the Clean Fuel Production Credit, set to take effect in January next year. A contentious issue dividing the industry concerns whether the tax incentive—known as Section 45Z—applies to low-carbon fuels made from biofuel feedstocks sourced overseas, such as used cooking oil and waste animal fats, which compete with domestically grown soybeans and other U.S. crops. Another major uncertainty surrounding the tax credit involves the outcome of next week’s U.S. presidential and congressional elections. It remains unclear whether the current administration will issue the proposed guidance before the inauguration of the new U.S. president.

Palm oil imports rise; Indonesian production rebounds; sharp export decline may signal demand rationing

Glenauk Economics stated in its report that imports are expected to increase in December amid a recovery in Indonesian output and higher export taxes—marking a stark contrast to the 44.4% decline recorded in November. According to the firm, buyers are taking time to transition to alternative oils, but palm oil prices have already exceeded affordability thresholds for edible oil producers in major importing markets reliant on soft oils. A similar trend is also visible in Malaysia. Meanwhile, high prices are spurring new supply, Glenauk Economics noted. It added that the U.S., following its soybean harvest, is exporting large volumes of soybean oil—including to India. Glenauk Economics also stated in its report that domestic U.S. buyers remain concerned about the 45Z tax credit, which incentivizes the production of clean transportation fuels, including sustainable aviation fuel. "Domestic U.S. buyers worry whether the 45Z tax credit—which replaces the B40 blending credit—will be finalized before President Trump’s inauguration." The firm added: "Indonesian biodiesel continues to influence the market as traders await the official announcement of B40 allocation, likely ranging between 13.5 million and 13.9 million metric tons (15.5–16.0 million kiloliters)."

Can 45Z Tax Credits Become Alto Ingredients' Next Earnings Driver?

Aug 11, 2026

Alto Ingredients projects $15-$16 million in 45Z tax credits for the full year, relying on them to drive earnings while expanding production and lowering carbon intensity.