Washington, D.C. – A coalition of U.S. senators has formally addressed the Biden administration with urgent inquiries regarding the substantial increase in imports of used cooking oil (UCO) from China. This development has raised alarms about potential exploitation of U.S. tax incentives and the integrity of these imports.
“We write to inquire about actions the Biden administration is taking to address concerns regarding the increased imports of used cooking oil (UCO) into the U.S. and the potential to exploit tax incentives by foreign actors,” begins the letter, which was signed by Senators Roger Marshall, Sherrod Brown, Pete Ricketts, Deb Fischer, Chuck Grassley, and Joni Ernst.
“The biofuels industry in the United States has long bolstered rural economies, diversified our liquid fuels, strengthened our national security, and reduced carbon emissions from our transportation sector,” the senators noted. “However, we have been made aware of another issue negatively impacting domestic biofuel feedstock producers.”
Since 2020, U.S. imports of UCO have surged from less than 200 million pounds to over 3 billion pounds in 2023, with more than half coming from China. There are concerns within the renewable fuels industry that some imported UCO may be adulterated with virgin vegetable oils, such as palm oil, which is linked to deforestation in Southeast Asia. This could constitute fraud, distorting commodity values and exploiting U.S. tax incentives.
The senators emphasize the importance of verifying the integrity of imported UCO. They highlight the rigorous standards imposed on domestic sources and urge the same level of scrutiny for imports to prevent fraud and protect American agriculture.
“The Biden administration has created vigorous standards to verify, not just trust, American producers, and it is imperative that the same scrutiny is applied to imported feedstocks,” the letter states.
The European Union has previously encountered fraudulent UCO imports from China, leading to increased scrutiny and a subsequent decline in European imports, which coincides with a rise in U.S. imports.
Given the growing demand for UCO driven by clean fuel policies, the senators stress the necessity of maintaining the integrity of feedstocks, especially as new clean fuel tax credits from the Inflation Reduction Act (IRA) are implemented. They call for thorough verification to ensure that counterfeit feedstocks are not incentivized by American tax dollars.
“The Biden administration has created vigorous standards to verify, not just trust, American producers, and it is imperative that the same scrutiny is applied to imported feedstocks.”
“Maintaining the integrity of feedstocks and renewable fuels should be of paramount importance to states with clean fuels policies. It is even more vital that the federal government prevent counterfeit imported feedstocks from being incentivized by American tax dollars as such tax credits are implemented,” they assert.
The sharp increase in UCO imports from China, coupled with concerns about potential fraud, highlights significant challenges for the U.S. biofuels industry. If foreign entities are exploiting tax incentives through mislabeling, it undermines the credibility of clean fuel policies and harms domestic producers who adhere to stringent standards.
The senators’ call for action reflects broader apprehensions about the economic and environmental impacts of such practices. Fraudulent UCO imports not only distort market values but also pose risks to sustainability goals by potentially incorporating deforestation-linked oils like palm oil.
The U.S. government faces the complex task of balancing the promotion of renewable fuels with ensuring the integrity of feedstocks. Enhanced verification protocols and stricter import scrutiny are crucial to prevent misuse of tax incentives and support genuine sustainability efforts.
The outcome of this inquiry could lead to tighter regulations and increased transparency in the importation process, reinforcing the biofuels industry’s role in reducing carbon emissions. As clean fuel policies evolve, maintaining rigorous standards will be essential to achieving long-term environmental and economic objectives.
