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A record-high U.S. mandate for biofuels is putting a new twist on an old debate: pet food versus fuel.
“It's kind of shocking. No one really gets that pet food and biofuels have anything to do with each other,” said Atalie Ebersole, vice president of government relations for the Pet Food Institute, which represents a sector with $52 billion in U.S. sales of food and treats for cats and dogs.
Producers of lower-emitting fuels got a boost last month when the Environmental Protection Agency set 2026-27 blending quotas for biomass-based diesel at the highest level ever. The bigger target means production of fuel used to power trucks, buses and other heavy vehicles needs to increase about 60% above last year, according to the Trump administration.
The problem for the pet food industry is that fuel producers have a financial incentive to make their products from animal fats, such as tallow. That’s left the two industries vying for the same feedstocks, a rivalry that’s intensified since around 2023, according to Ebersole.
“Animal fat prices have just skyrocketed,” she said. “That makes it harder for our producers to secure long-term contracts for those critical ingredients, and eventually prices will have to go up for consumers because it's not sustainable to keep paying more for animal fats.”
As of last week, chicken fat is up more than 40% since January, with other fats posting similar increases, Ebersole told Agri-Pulse, citing price-reporting firm Fastmarkets.
Atalie Ebersole (Linkedin photo)The biofuel industry says renewable fuel production helps temper the cost of feedstocks like soybean meal that’s also used in pet food.
“Pet food manufacturers use as much soy meal in their formulations as animal fats and tallow combined,” said Paul Winters, director of public affairs and federal communications for Clean Fuels Alliance America. “The pet food industry’s use of animal meal is also far greater than their demand for animal fats.”
Ebersole stressed the importance of animal fats for dogs, cats and other pets.
“Animal fats help with key functions such as immune and visual systems, as well as supporting healthy skin and coats and brain function … and they can’t really be substituted,” she said. “They also help with palatability and making sure that cats and dogs are eating what they really prefer to eat.”
The Pet Food Institute, in arguing against EPA’s then proposed blending rules last August, said high quotas would add to supply burdens driven by California’s Low Carbon Fuel Standard and the new federal Clean Fuels Production Credit, known as 45Z.
Nearly half of the biomass-based diesel produced in the U.S. over the last two years uses domestic fats, oils and greases, the 68-year-old trade group said, citing USDA.
Pet food, treats up 25% since 2021
Clean Fuels, which represents makers of biomass-based diesel and sustainable aviation fuel, also said the overall food system benefits from increased crushing of soybeans to extract soy oil, which is also a common ingredient for making bio-based diesel. The crush process creates meal that’s widely used to feed farm animals raised for meat. The increase in meal production has brought down feed costs, tempering the cost of meat.
“Biodiesel and renewable diesel are expected to meet as much as 10% of the nation’s demand for diesel fuels this year, a crucial supply that’s needed to moderate fuel costs for all consumers and specifically the shipping costs of every consumer item,” Winters told Agri-Pulse. “We are an essential part of both the fuel and the food supply.”
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Interest among oil refiners in shifting some production of fossil fuel to renewable diesel took off during the pandemic. The energy companies, faced with plummeting traditional fuel consumption due to COVID-19 lockdowns, sought to benefit from incentives in low-carbon fuel markets like California.
Such programs have expanded since then, including at the national level. Fuels made from waste animal fats and used cooking oil enjoy a premium value due to a relatively smaller greenhouse gas footprint compared with biofuel feedstocks like fresh vegetable oil.
As of March, the Consumer Price Index for pet food and treats in U.S. cities had jumped 25% from the same period five years earlier, according to government data. How much of that rise is from higher prices of fats isn’t clear, however.
While bigger manufactures benefit from longer term contracts, smaller companies that don’t have that flexibility end up paying more for such ingredients.
Another issue is that the pet food industry needs to get its animal fats domestically because of strict laws aimed at preventing the food from going rancid.
“It would be great if the biofuel industry would actually use more imported animal fats,” Ebersole said. “We can't use them.”
One silver lining for the industry in the latest biofuel-blending rules is the EPA’s decision to delay until 2028 a rule intended to financially incentivize use of domestic feedstocks, according to Ebersole.
“That would have probably pushed us over the cliff.”
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