Advanced BioFuels USA

(Stillwater Associates) In late January of 2023, Senate Bill 803 was introduced into the Oregon state Senate.(1) If the bill were to pass, it would require all diesel sold in the Portland metropolitan area (Clackamas, Washington, and Multnomah counties) to meet a carbon intensity of 60 gCO2e/MJ after January 1, 2026, and impose the same requirement in Western Oregon beginning on January 1, 2028, and the entire state of Oregon on January 1, 2030.  SB 803 would also limit petroleum diesel to 1% of the diesel sold into these regions as it is implemented which means that 99% would be a combination of two renewable fuels – biodiesel (BD) and/or renewable diesel (RD).  This paper describes some of the effects that SB 803 would likely have on fuel cost and supply in Oregon.

Costs of Replacing Ultra-Low Sulfur Diesel (ULSD) 

ULSD would have to be replaced by a blend of the two types of biomass-based diesel – biodiesel and renewable diesel. Because BD is chemically different than petroleum-derived diesel, it is limited to a 5% blend (B5) or so in older engines while most newer vehicles have OEM approval for the use of up to 20% BD (B20).  The EPA also requires certification of underground storage tanks to be compatible with any diesel blends with greater than 20% BD.(2)  Oregon currently requires all diesel sold to contain 5% BD, and the Clean Fuels Program (CFP) has caused BD blending to increase to about 11% of the diesel pool by the second quarter of 2022. By contrast, RD is essentially chemically identical to ULSD, so there is no limitation on its use in diesel vehicles. As such, it would likely make up more than 80% of the diesel supplied if petroleum diesel is banned.

SB 803 has a provision to suspend enforcement of the law if the price of the renewable fuel making up 99% of supply exceeds the price of ULSD. 

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In Combination with CFP, Banning ULSD Would Shift Costs from Gasoline Consumers to Diesel Consumers

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Fuel Supply Impacts

Supply impacts of enacting SB 803 are discussed below. These are also likely to impact costs in the fuel value chain.

Supply into the Portland Region in 2026

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Emergency Preparedness Program

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Logistics

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Lastly, the federal government requires specific labelling for any retail sales of diesel with more than 5% RD, so the transition away from petroleum diesel will require labels at every point of sale in the state. Since Oregon already requires the diesel pool to be at least B5, the labels for BD should already be in place.   READ MORE

Greening Oregon’s Diesel Pool: Biodiesel and Renewable Diesel Supply (Stillwater Associates)