US Limits Cooking Oil Imports with Green Fuels Act

The United States has limited imports of used cooking oil, preventing foreign supplies used to make biofuels from qualifying for a lucrative tax credit.

In long-awaited guidance, the U.S. Treasury Department indicated that fuel produced from imported supplies will not qualify under the GREET model, a tool used to determine the full greenhouse gas emissions from the transportation and energy industries.

Five countries accounted for more than half of global carbon dioxide emissions in 2022, according to the European Commission’s EDGAR.

The move comes after a flood of used cooking oil from China flooded into American shores at cheaper prices than domestically produced soybean oil. The decision is a victory for American farmers who had been counting on the biofuels boom to sell their crops.

“This tax credit is essential to strengthening American competitiveness and reducing emissions in the transportation sector through cleaner, more affordable fuels,” U.S. Deputy Energy Secretary David Turk said in a statement. “Today’s final guidance provides clarity and certainty for America’s world-leading biofuels industry,” he added.

Fuel produced using used cooking oil is highly valuable in low-carbon fuel markets like California because of its relatively small carbon footprint.