NEW YORK (Reuters) -U.S. imports of biodiesel and renewable diesel slumped to a decade low in the first half of 2025 after a change in tax credits for the fuels went into effect, the U.S. Energy Information Administration said on Thursday.

The U.S. this year revamped the way it awards tax credits designed to incentivize biofuel production and consumption, with the changes effectively ending such incentives for imports of biodiesel and renewable diesel. Until last year, imports and local production earned the same $1 per gallon credit, but the new program applies to domestic production only.

"This tax credit change placed imports at a relative economic disadvantage," the EIA said.

U.S. biodiesel imports averaged 2,000 barrels per day in the first half of this year, compared to 35,000 bpd in the same period last year, EIA data showed. Renewable diesel imports fell to 5,000 bpd from 33,000 bpd last year.

For both fuels, these are the lowest imports in the first six months of the year since 2012, EIA data showed.

The decline in imports was also partly attributable to a slowdown in consumption due to uncertainty around blending requirements and negative profit margins for blending biofuels, the EIA said.

Consumption will likely pick up in the months ahead to meet existing mandates under the U.S. Renewable Fuel Standard program, but imports will remain low due to the change in tax credits, the EIA said.

"(We) forecast U.S. biodiesel net imports in 2025 and 2026 to be their lowest since 2012," the EIA said.

(Reporting by Shariq Khan in New York; Editing by Emelia Sithole-Matarise)