W|Carbon: Tariff Analysis For Low Carbon Markets
Evaluating Tariff Reverberation Through Agricultural Feedstock Markets
About W|Carbon - For access information, contact info@webberresearch.com or Webber Research Institutional Sales at walter.lobo@webberresearch.com or Subscribe below:
Table of Contents
Tariff Analysis – Impacts Facing Low Carbon Markets…3
Tariff Stakeholder Impact Analysis…4
Graphic Analysis For Corn & Soybean Export Exposure…5
Contact Information & Disclosures…7
W|Carbon Key Takeaways
Tariff Announcements Create Exposure For Swaths Of U.S. Low Carbon Markets
Background: Escalating rounds of tariffs have been proposed, delayed, enacted, and dropped by the Trump Administration since Inauguration Day. A 10% baseline tariff on all goods was implemented on 4/2, with various carveouts already in place, including exemptions for Canada and Mexico. Further exemptions and delays followed, culminating in a 90-day negotiation period for the Administration to rectify what it views as unfair treatment of U.S. products and to demonstrate meaningful progress toward its trade and economic campaign agenda.
So far, responses by countries have been largely transactional (delivering concessions of varying impacts), reciprocal (taking form of tit-for-tat rate increases), and targeted against particular sectors and states.
Pathway Impact Analysis:
The tariffs create exposure to the U.S. low carbon markets in a few ways:
Targeted retaliation against U.S. exports of renewable fuels, especially ethanol, creating downward pressure on U.S. prices and producer margins. Targeted tariffs work exceptionally well for activating a well-organized industry to pressure concessions. The EU has already taken this approach at a sector and state level.
Retaliation against U.S. exports of co-products such as distillers dried grains (DGS), again weighing on margins.
Increased import costs for renewable fuels or feedstock imports such as biodiesel, renewable diesel, and used cooking oil (UCO).
U.S. meat exports, fed on U.S. oilseeds and feed grains, may face export barriers that reverberate back into commodity feedstock markets.
Ethanol: The U.S. is a net exporter of ethanol, annually exporting about 10% of production, most recently 1.7 billion gallons. The export market is concentrated with 75% of exports destined to just 5 markets (Canada, United Kingdom, India, European Union, and Colombia), with a third of total exports destined to Canada alone. Co-products also...continued…
Biodiesel imports make up roughly 25% of total U.S. consumption, sourced from the European Union (Germany & Spain) and Canada. While...continued…
Renewable Diesel imports make up 15% of total U.S. consumption with total volume consumed almost entirely by...continued…
Biomethane has the least direct exposure from tariffs for current producers, although several active landfill gas pathways exist under the LCFS from Canada but make up a small portion of the overall market. Tariff hikes will likely...continued…
Electricity credits are mostly generated from at home grid EV charging...continued…
W|Carbon Analysis: As exemptions and carveouts are under negotiation, and the Administration walks back tariffs on its own timeline, we have analyzed various renewable fuel pathways for tariff exposure...continued…
For access information, contact info@webberresearch.com or Webber Research Institutional Sales at walter.lobo@webberresearch.com or Subscribe below: