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The U.S. renewable fuel industry has hit a significant milestone. According to a recent report from the USDA, renewable diesel production has surged from a modest 40 million gallons in the 2010/11 marketing year to a staggering 2.3 billion gallons in 2022/23. For the first time, renewable diesel has outpaced biodiesel production, marking a pivotal shift in the biofuel landscape.
The Rise of Renewable Diesel
Leading the charge in this growth is Neste, a key player in the renewable diesel sector both in the U.S. and globally. Renewable diesel’s rapid expansion is crucial due to its distinct advantages over biodiesel. Unlike biodiesel, which requires blending with traditional diesel, renewable diesel is a “drop-in” fuel, meaning it can be used directly in diesel engines without modification. This characteristic simplifies the transition for users and offers significant greenhouse gas (GHG) emissions reductions compared to both biodiesel and fossil diesel.
The Role of the Renewable Fuel Standard
The U.S. Renewable Fuel Standard (RFS), established in the mid-2000s, has been a driving force behind the biofuel industry’s growth. The program mandates that a specific volume of certain biofuels, including biomass-based diesel, be incorporated into the nation’s transportation fuel supply each year. For years, biodiesel—produced from fats like soybean oil, corn oil, yellow grease, or tallow—dominated this category. However, biodiesel must be blended with traditional diesel, which limits its direct usability.
The Shift in Biofuel Production
Biodiesel production saw steady growth in the early 2000s, reaching a peak of 1.8 billion gallons during the 2018/19 marketing year. However, by 2022/23, production had slightly declined to 1.7 billion gallons. During this time, renewable diesel began to displace biodiesel’s share of the market.
Renewable diesel can be produced from similar feedstocks as biodiesel but offers greater flexibility and ease of use due to its drop-in nature. As a result, renewable diesel production has skyrocketed, surpassing biodiesel for the first time.
The Impact on Biomass-Based Diesel
The combined production of biodiesel and renewable diesel has pushed total biomass-based diesel production to an all-time high in 2022/23. Since the early 2000s, this sector of the biofuels industry has grown substantially, leading to an increasing share of U.S.-produced soybean oil being diverted to biofuel production. This share has grown from less than 1% in 2001/02 to an impressive 46% in 2022/23.
A Greener Future
This shift towards renewable diesel signals a broader move towards cleaner, more sustainable energy sources. As the U.S. continues to invest in renewable fuels, the environmental benefits, particularly in terms of reduced GHG emissions, will only become more pronounced. For companies and consumers alike, renewable diesel offers a promising path forward in the pursuit of a greener future.
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