US-China Summit: Policy, Trade Developments Last Week Cloud Outlook for Global Biofuel Feedstock Markets

Why It Matters

The lack of clear trade commitments keeps U.S. soybean‑based biofuel feedstock markets volatile, while China’s push for domestic waste‑oil SAF heightens competition for limited UCO supplies, affecting pricing and availability for renewable diesel producers.

Key Takeaways

• US-China summit yielded no firm soybean trade commitments
• Soybean oil feedstock outlook remains uncertain, dampening biodiesel support
• China’s new UCO‑to‑SAF project targets 600k tonnes feedstock annually
• US UCO imports fell 67% YoY Q1 2026, especially from China
• Draft 45Z guidance limits foreign UCO eligibility, tightening supply

Pulse Analysis

The recent U.S.-China summit underscored the geopolitical tug‑of‑war over agricultural commodities that underpin the renewable fuels sector. While both leaders expressed a desire to re‑engage, the absence of firm soybean purchase agreements or tariff revisions left market participants cautious. Soybean‑derived oil, a cornerstone feedstock for biodiesel and renewable diesel, now faces muted demand expectations, pressuring futures prices and prompting producers to reassess supply strategies.

China’s parallel move to cement a closed‑loop UCO‑to‑SAF system in Lianyungang adds a new layer of complexity. The agreement with China National Aviation Fuel Group aims to collect and convert more than 600,000 tonnes of used cooking oil each year, bolstering the nation’s sustainable aviation fuel ambitions for 2025 and beyond. This domestic focus on waste‑oil feedstocks reduces the pool of export‑ready UCO, tightening global supplies and driving up prices for competing feedstocks such as soybean oil, tallow and animal fats.

On the U.S. side, imported UCO volumes have slumped dramatically, with Q1 2026 imports down to roughly 233,000 tonnes—a 67% decline from the same period a year earlier—and Chinese shipments plunging by over 75%. Draft 45Z guidance further narrows eligibility for foreign‑origin UCO, amplifying supply constraints. The convergence of trade uncertainty and tighter policy on waste‑oil imports creates a volatile pricing environment, compelling renewable fuel producers to diversify feedstock mixes and hedge against future disruptions. Understanding these intertwined trade and policy dynamics is essential for stakeholders navigating the evolving biofuel landscape.