Biofuels Production Capacity Increased by 7% in 2023
The United States biofuels production capacity grew by 7% in 2023, reaching 24 billion gallons per year (gal/y) by January 2024, according to the U.S. Energy Information Administration (EIA). This growth was primarily driven by a 44% increase in renewable diesel and other biofuels, highlighting the expanding role of advanced biofuels in the energy mix.
Several factors have contributed to the increase in biofuels production capacity, including federal and state tax incentives, regulatory policies promoting cleaner fuels, and significant plant expansions. Continued investments in new facilities and technological advancements have also played a crucial role in supporting this growth trajectory.
Breakdown by Fuel Type
- Renewable Diesel and Other Biofuels: Production capacity for renewable diesel and other biofuels, including renewable jet fuel, renewable heating oil, and renewable gasoline, reached 4.3 billion gal/y in January 2024. This marks an increase of 1.3 billion gal/y from the previous year.
- Fuel Ethanol: Fuel ethanol remains the dominant biofuel in the U.S., with production capacity reaching 18 billion gal/y in January 2024—a 2% increase from 2023. This fuel is primarily derived from corn kernel starch and is widely blended with gasoline.
- Biodiesel: Biodiesel production capacity remained relatively unchanged at 2.1 billion gal/y. Despite new capacity additions in states like Florida and Kentucky, closures in Georgia, Iowa, Oregon, and South Carolina offset these gains.
Regional Distribution of Biofuels Production
Iowa remains the leading state for biofuels production, boasting more than 5.4 billion gal/y of capacity. In total, 14 states across the Midwest, Gulf Coast, and West Coast regions account for 90% of the nation’s biofuels production capacity.
For renewable diesel and other biofuels, Louisiana and California lead with over 1 billion gal/y each. Together, these two states represent more than 80% of the nation’s renewable diesel and other biofuels capacity.
New Plant Developments
In 2023, biofuel producers in 22 states reported new renewable diesel and other biofuels capacity, an increase from 17 states in the previous year. Notable capacity additions were observed in Alabama, California, Louisiana, Pennsylvania, and Washington.
Ethanol Production
Fuel ethanol production capacity continues to be concentrated in the Midwest, where states like Iowa, Nebraska, Illinois, South Dakota, Minnesota, and Indiana each have over 1.4 billion gal/y of capacity. The region’s abundant corn supply serves as the primary feedstock, reinforcing its central role in ethanol production.
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This article is part of Daily Market News & Insights
Tagged: biofuels, biofuels production
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