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Renewable Diesel Should Accelerate US Biofuel Growth

DENVER — By producing fuel from less carbon-intensive sources than traditional petroleum-based products, the U.S. biofuels industry is well positioned to play a major role in reducing greenhouse gas emissions. According to a new report from CoBank’s Knowledge Exchange, the recent increase in investment in renewable diesel generation capacity in the United States is expected to trigger a period of growth and transition for the biofuels industry.

“The outlook for biofuels is positive as the United States and other major developed nations embrace renewable liquid transportation fuels as a solution to reducing greenhouse gas emissions,” said Kenneth Scott Zuckerberg, senior economist. grain and agricultural supply for CoBank. “Renewable diesel offers the most intriguing opportunity in biofuels, given its extraordinary growth potential.”

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As major oil companies have begun to adopt renewable diesel, US production is expected to increase exponentially. Several industry stakeholders have announced plans for new soybean crushing and refining facilities over the past two years. Soybean oil is the most common feedstock used to produce renewable diesel. Combined, the proposed crushing and refining projects would increase renewable diesel production capacity in the United States sixfold by 2030 to 6.5 billion gallons per year.

However, the expected growth of renewable diesel made from soybean oil requires many more bushels of soybeans for home grinding. CoBank estimates U.S. soybean acreage would need to increase by 17.9 million acres to fill the supply gap created by announced additional crushing and refining projects. Also, the United States should stop exporting whole soybeans.



Alternatives to a massive transfer of acres from corn to soybeans would include growing other oilseeds like canola and sunflower on a larger scale, importing other vegetable oils, or using other feedstocks such as beef tallow to produce renewable diesel fuel.

Biofuel production has increased nearly 8% each year for the past 15 years, thanks to tax credits and targeted government programs, including the federal Renewable Fuels Standards Program and California’s low carbon fuels. The Cut Inflation Act 2022 will increase the use of renewable energy in general, and biofuels in particular.

Biodiesel and renewable diesel are 50-55% lower carbon intensity than traditional petroleum diesel. Although renewable diesel and biodiesel have such low carbon scores, renewable diesel offers the added benefit of being used as an “alternative” fuel. This means it does not require further blending with petroleum diesel, which is necessary before biodiesel can be used by commercial engines. As an alternative fuel, renewable diesel requires no modifications to older engines, a key attribute for increased adoption.

Read the report, Renewable Diesel Projected to Turbo Charge Biofuel Growth at https://www.cobank.com/knowledge-exchange/grain-and-farm-supply/renewable-diesel-projected-to-turbo-charge-biofuel-growth ?utm_source=mediabase&utm_medium=email&utm_campaign=knowledge-exchange&utm_content=biofuels.