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You are at:Home»News»Climate change»US renewable diesel production could double
by 2025
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US RENEWABLE DIESEL PRODUCTION COULD DOUBLE BY 2025

0
By Saul Wordsworth on 8th February 2023 Climate change

U.S. production capacity for renewable diesel could more than double from
current levels by the end of 2025, based on several announcements for projects
that are either under construction or could start development soon, according to
the latest Today in Energy report from the U.S. Energy Information
Administration (EIA).


ABOVE: Graph showing how the capacity for renewable diesel in US is set to
double by 2025 

Two factors behind growing U.S. renewable diesel capacity are rising targets for
state and federal renewable fuel programs and biomass-based diesel tax credits.
The Inflation Reduction Act of 2022 extended the biomass-based diesel tax
credits through 2024.

The EIA report estimated U.S. renewable diesel production capacity was 170,000
barrels per day (b/d), or 2.6 billion gallons per year (gal/y), at the end of
2022. While the agency said it expects some announced projects will be delayed
or canceled, if all projects begin operations as scheduled, U.S. renewable
diesel production capacity could reach 384,000 b/d, or 5.9 billion gal/y, by the
end of 2025.

Renewable diesel is a fuel that is chemically equivalent to petroleum diesel and
nearly identical in its performance characteristics. Its chemical equivalence to
petroleum diesel gives it a couple of advantages over biodiesel, one being that
producers can distribute renewable diesel in petroleum diesel pipelines. A
second advantage is that traditional diesel engines can consume any blend level
of renewable diesel, including pure renewable diesel, with no significant side
effects. In contrast, biodiesel can only be blended into petroleum diesel
between 2% and 20% of the diesel fuel by volume.

Renewable diesel has some of the highest greenhouse gas (GHG) reduction scores
among existing fuel pathways in programs such as the federal Renewable Fuel
Standard (RFS), the California Low-Carbon Fuel Standard (LCFS), the Oregon Clean
Fuels Program and the Washington State Clean Fuels Program.

Investment in new renewable diesel production capacity has recently grown
significantly in the United States because of renewable diesel’s
interchangeability with petroleum diesel in existing petroleum infrastructure
and because of government incentives. In 2022 and early 2023, eight new
renewable diesel refineries in Oklahoma, Texas, New Mexico, Wyoming, Montana,
Nevada, Kansas and Louisiana, began production.

The production capacity currently scheduled to begin operation could allow
renewable diesel to contribute to a greater share of West Coast diesel
consumption, EIA said. Most renewable diesel in the United States has
historically been consumed on the West Coast, where producers can take advantage
of both RIN credits from the RFS and state credits from one of the state
renewable fuel programs. An average of 520,000 b/d of distillate fuel oil was
consumed on the West Coast in 2021. The region, which is also the largest
renewable diesel importing region in the United States, could soon meet the
majority of its distillate fuel needs from renewable diesel by 2025 if domestic
renewable diesel capacity increases as scheduled.

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ABOUT AUTHOR

Saul Wordsworth

Saul Wordsworth is deputy editor of the iVT brand - which includes digital and
print editions of a quarterly magazine and Off-Highway Annual, as well as
ivtinternational.com. He is a keen cyclist and lives in north London.


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