* Few registrations from foreign producers make meeting EPA

mandates difficult, Valero executive says

* Elimination of tax credits for imported biofuels also

stifling imports, executive says

* Economist disputes Valero claim that importer

registrations are constraining 2026 compliance

By Siddharth Cavale

NEW YORK, July 30 (Reuters) - U.S. biofuel imports are not

rising quickly enough to help the industry comply with the

Environmental Protection Agency's renewable fuel blending

mandates, as imports no longer benefit from key U.S. tax

incentives, a Valero Energy ( VLO ) executive said on Thursday.

Many foreign producers are not registered to generate

compliance credits, which is also stifling imports, executives

at the U.S. refining company said.

The EPA finalized record bio-based diesel requirements this year

under the Renewable Fuel Standard, mandating refiners and fuel

importers to blend more biofuel into the nation's fuel supply or

purchase Renewable Identification Number credits to meet their

obligations.

Historically, imports helped fill supply gaps because fuel

blenders could claim a $1-per-gallon blender's tax credit on

imported bio-based diesel. That incentive was replaced in

2025 by the 45Z Clean Fuel Production tax credit, which

generally benefits domestic bio-based diesel rather than

imported volumes.

As a result, imports of bio-based diesel have increased

more slowly than some market participants had expected, Eric

Honeyman, Valero's senior vice president of renewable operations

and low carbon fuels, said on the refiner's earnings call.

"What's different now with (EPA's new mandates) is you have

to be registered to generate RINs, and a lot of these foreign

importers are not registered to generate RINs," Honeyman said.

"You also have the elimination of all tax credit benefits

to foreign imports ... and with the recent announcements of

additional tariffs it just makes that hurdle more difficult."

Scott Irwin, an agricultural economist at the University of

Illinois, said while it was true the 45Z producer tax credit

made imported biodiesel ineligible, he disagreed with Honeyman's

assertion that registrations were an issue.

"What is patently false is the statement that not enough

importers are registered to help meet the 2026 (obligations)",

he said in an email, adding that imports for total bio-based

diesel amounted to nearly 1 billion physical gallons in 2024.

"There is plenty of registered capacity and enough domestic

production capacity to fulfill the 2026 (obligations)," Irwin

said.

Through June, the United States has imported this year only

25% of the 40.6 million gallons of biodiesel it imported during

the same period in 2024, according to Argus Media principal

consultant Zander Capozzola.