The Potential of Renewable Diesel

November 05, 2024

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by Carrie Song (Neste/NGT News) ... There have been arguments suggesting that renewable liquid fuels are just the bridging solutions before all the vehicles and equipment transition to electric or hydrogen. However, recently a number of car giants have made changes to their all electric fleets plan – this shows that there’s no silver bullet to tackle the GHG emissions issue. A solution that works perfectly for one industry may not work for another. To make a meaningful climate impact, it’s important to adopt the best available technologies and act immediately.

According to a recent research from the Energy Technology Forum, for the largest commercial vehicles, the internal combustion engine (ICE) is predicted to be the power source for 75% of the new vehicles. The staying power of advanced ICE is even more pronounced in heavy-duty off-road applications in agriculture, construction, marine, rail and power generation.

At the moment, no batteries or hydrogen fueled vehicles can deliver the same endurance and strong performance that ICE engines are currently capable of. Renewable diesel is a perfect solution for these heavy-duty applications to immediately reduce their GHG emissions.

Renewable diesel’s boom

Our company began producing renewable diesel in the early 2000s and has observed how this solution has matured and is now endorsed by the heavy-duty sectors. Today, the majority of renewable diesel in the U.S. is consumed on the West Coast, where producers can take advantage of RIN credits from the Renewable Fuel Standard (RFS) program and the Blender Tax Credit, along with state-level LCFS-style programs in California, Oregon and Washington.

Over time, continued technology development and increased supply will continue to accelerate renewable fuel adoption. However, for producers, long-term, stable incentive programs are key to maintain renewable fuels’ momentum and phase out the use of fossil fuels.

In addition to government support, the private sector can do its part to create synergies that foster renewable fuel procurement and generate more public awareness of the benefits related to renewable diesel, so more businesses can get to know, adopt and endorse this lower-emission solution.

Meeting future demand

There are several different technology pathways to produce renewable diesel. Currently, hydrotreating is the most common pathway used by commercial fuel producers, with animal fats, used cooking oil, and greases being the most common raw materials.

Research from World Economic Forum and McKinsey suggests that up to 40 million tons of waste and residue materials annually can be available for renewable fuel production by 2030. However, this is not sufficient to meet long-term forecasted demand.

As a result, producers are continuing to work toward increasing the availability of these renewable raw materials while also developing technologies to diversify supply with new scalable materials, such as algae and novel vegetable oils produced by regenerative farming practices. These raw materials can play a crucial role in meeting the growing global demand for renewable products.

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Our company has been exploring different regenerative agricultural concepts for several years and is currently conducting over 60 field trials in several regions with a variety of crops to identify most promising concepts for scale-up. Each project is carefully assessed in terms of its impact on soil health, carbon sequestration potential and GHG emissions savings, biodiversity promotion, and economic viability.

We have set a target to increase the availability of novel vegetable oils to reach 20% of our raw material pool by 2035. We are also looking at ways to reuse waste plastics and power to X and hope to commercialize some of these solutions in the 2030s.

The development of these raw materials require partners and larger ecosystems for innovation, development and commercialization.

Continue to grow the momentum

Beyond the U.S. West Coast, it has been interesting to watch other states begin to contemplate LCFS-style programs throughout the country. New Mexico just passed its clean fuel standard this year, and we have seen more than a dozen states file similar legislation, from New Jersey and Massachusetts to Michigan and Minnesota, and Hawaii to round out the West Coast corridor.

Collaboration through the entire value chain is also crucial to keep the momentum growing – from producers to end users, each party in the energy ecosystem has a role to play, from researching and piloting novel raw materials to investing in these technologies, and to endorsing and adopting lower-emission solutions like renewable diesel. READ MORE

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What You Can Do Washington vegetable oils used cooking oil (UCO) Transportation Fuels Policy Sustainability soil health Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel regenerative farming recycled plastics power-to-x/gas/liquid plastic Oregon New Mexico New Jersey Minnesota Michigan Massachusetts markets/sales market forces LCFS (Low Carbon Fuel Standard) Investing internal combustion engine (ICE) hydrotreating HVO (Hydrotreated vegetable oil) heavy duty vehicles (HDV) Hawai'i grease GHG (Greenhouse Gas Emissions) Intensity Finland environmental policy Electric Car/Electric Vehicle (EV) Clean Fuel Standard/Policy (CFS) carbon/CO2 sequestration carbon capture and storage (CCS) California BioRefineries/Renewable Fuel Production animal fat algae

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