Renewable Diesel – Is It Right for Your Fleet?

By Published On: August 6, 2021Categories: Daily Market News & Insights

Recently, the EIA shared an update on renewable diesel (RD), highlighting a growing transition to the new fuel product. What is renewable diesel, and is it right for your fleet?

What Is Renewable Diesel

Renewable diesel, also referred to as green diesel, is a relatively new market product that is chemically identical to petroleum-based diesel fuel. Unlike biodiesel, 100% RD fuel can be consumed without voiding vehicle warranties or causing performance issues. RD can also be blended with biodiesel, taking advantage of RD’s superior chemical make-up and biodiesel’s relative supply abundance.

Renewable diesel is treated preferentially by green legislation such as the federal Renewable Fuel Standard and California’s Low-Carbon Fuel Standard. Its GHG reduction score exceeds that of other products, so green policies tend to incentivize fleets transitioning to RD via tax credits, RINs, and other mechanisms.

Growing Popularity

Renewable diesel is undergoing a huge shift. Last year, total RD production capacity was around 40 kbpd – roughly 600 million gallons per year. By 2024, total production capacity will be nearly 10x higher, at 5 billion gallons per year. Overall, RD will go from being a blip in the data to making up 5% of all US diesel consumption.

New production will be focused on the West Coast, where financial incentives make renewable diesel very competitive relative to traditional petroleum products. California, Oregon, and Washington will be the heaviest consumers. Gulf Coast producers are increasingly shifting their production to RD, shipping the product out west for consumption.

Is RD Right for My Fleet?

Right now, renewable diesel is primarily available in California, since that’s where the economics are most favorable. Consumers in other areas of the country may see increased availability in the coming years, but for now, the economics are best on the West Coast.

RD has several environmental benefits. It burns cleaner than normal diesel, providing better combustion and up to 85% fewer emissions as a result. The fuel’s carbon intensity is lower than conventional diesel, and its feedstocks are 100% renewable.

Economically, RD can also be a clear choice. RD can help California fleets reduce their fuel costs directly by lowering fuel taxes and alleviating the need to purchase expensive NOX-reducing additives. Outside of California, RD will have varying economic justifications, though the environmental benefits will remain. RD also tends to have a 50-80% higher cetane rate than traditional diesel, increasing power and cold start properties.

The best way to determine whether renewable diesel is right for your fleet is to schedule a consultation with a fuel supplier. Mansfield can diagnose your operations and current fuel spend to provide precise details on the potential economic, environmental, and operational benefits. Contact a biofuels expert today!

This article is part of Daily Market News & Insights

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