Renewable Diesel Production Capacity Overtaking Biodiesel in 2023

By Published On: September 18, 2023Categories: Daily Market News & Insights

What’s the dominant form of bio-based diesel in the US? A year ago, if you guessed biodiesel, you would be correct – but not anymore. The United States has achieved a remarkable achievement in its biofuel production landscape. As of January 2023, the capacity for renewable diesel production in the US reached an impressive 3 billion gallons per year, surpassing the capacity for biodiesel production for the first time in history.

The total capacity for nationwide overall biofuel production, which includes renewable diesel, biodiesel, ethanol, and other biofuels, reached 23 billion gallons per year. This is a 6 percent increase compared to what it was in January 2022.

This result can be attributed to a combination of factors. According to the US Energy Information Administration (EIA), rising targets set by state and federal renewable fuel programs, coupled with the renewal of biomass-based diesel tax credits, have provided a substantial boost to the growth of renewable diesel capacity in the United States.

The EIA began collecting data on U.S. renewable diesel and biofuels production capacity in 2021. Since then, it has surged, more than tripling within just two years. On the other hand, biodiesel production capacity experienced a decline of 13 percent, during the same period, making it the smallest of the three biofuel categories tracked by the EIA.

Renewable Diesel versus Biodiesel. What’s the difference?

Renewable diesel is a type of fuel that’s very similar to regular diesel in terms of its chemical composition and how it performs, while biodiesel has different chemical properties when compared to regular diesel. Click the links to learn more about renewable diesel and biodiesel.

Geographical Landscape

The surge in renewable diesel production capacity is remarkable, marking a 71 percent increase. The geographical landscape has also evolved. In January 2023, 11 states reported sites with renewable diesel and biofuels production, a substantial increase from the 6 states that reported such capacity in 2022. Notably, Texas, which had no renewable diesel capacity in January 2022, has emerged as a major player in this sector, boasting 537 million gallons per year of capacity, making it the second-largest producer after Louisiana.

Unlike ethanol and biodiesel, which have a strong presence in the Midwest, over 60 percent of U.S. renewable diesel production capacity is located on the Gulf Coast.

The majority of U.S. biodiesel capacity, approximately 70 percent, is concentrated in the Midwest, primarily in states such as Iowa, Missouri, Illinois, and Indiana.

Ethanol production remains steady, with capacity increasing by 283 million gallons per year between 2022 and 2023. More than 90 percent of U.S. ethanol capacity is situated in the Midwest, where the primary feedstock, corn, is cultivated, particularly in Iowa, Nebraska, Illinois, and South Dakota.

The increasing production of renewable diesel and other biofuels represents a growing trend towards cleaner and more sustainable fuels. While this transition may pose challenges to the traditional oil and gas industry, it also offers opportunities for adaptation and diversification in response to changing market and regulatory conditions.

Looking for a renewable diesel supplier?

Renewable diesel offers a variety of benefits, both for the environment and the economy. With cleaner combustion and up to 85% fewer emissions compared to conventional diesel, it significantly contributes to reducing air pollution and combating climate change. Additionally, renewable diesel’s lower carbon intensity and use of 100% renewable feedstocks enhance its appeal.

If you want to know if renewable diesel is a good fit for your fleet, reach out to Mansfield. Our experts will take a close look at your operations and current fuel costs to give you details about the economic, environmental, and operational benefits you can expect.

Contact our biofuels expert today!


This article is part of Daily Market News & Insights


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