Biofuels, Policy, and the Changing Dynamics of Soybean Oil

Source: Reuters / USDA Report

16th July 2025

A quiet transformation is underway in the global soybean oil market — one shaped by tightening U.S. biofuel policy and surging domestic demand.

According to the latest USDA figures, over half of all U.S. soybean oil will be consumed by domestic biofuel producers in 2025/26. Usage is forecast to reach an unprecedented 15.5 billion pounds — a year-on-year increase of more than 26%. In contrast, U.S. exports of soybean oil are expected to fall by nearly 75%.

This shift reflects a confluence of regulatory and economic forces, including:

✅ Expanded blending mandates from the U.S. Environmental Protection Agency
✅ Restrictions on renewable fuel imports and non-domestic feedstocks
✅ Enhanced clean fuel tax credits and state-level incentives

Together, these changes elevate the role of domestically sourced vegetable oils — particularly soybean and canola — as cornerstone feedstocks in the global energy mix.

For stakeholders across the agri-commodities, biofuels, and renewables sectors, this signals a reshaping of priorities and pressures. Procurement strategies, trade flows, and refining capacity are all being recalibrated to meet the new demands of the clean energy transition.

At Gapuma Group, we continue to track these developments closely. Understanding the interplay between global trade, energy security, and sustainability is central to our work — and to the future of responsible supply.