The Rise of Renewable Diesel & Biodiesel
by Nicolas Bulver (Renewable Energy Group/Union Pacific Track Record) What is causing the increased demand for renewable diesel and biodiesel and what is the impact on supply chains?
Can waste products become fuel? The answer is yes if you’re talking about vegetable oils, greases or animal fats. These very products, which would otherwise be disposed of, are the feedstocks used to make renewable diesel and biodiesel. When refined into these fuels, things like animal fat, used cooking oil from restaurants, inedible corn oil from ethanol plants, and other agricultural waste products can power a diesel engine — and burn cleaner than conventional diesel, too.
Historically, California has been the largest consumer of renewable diesel, thanks to the economic benefits offered by the state’s Low Carbon Fuel Standard. While California consumed the majority of the 960 million gallons of renewable diesel used in the United States in 2020, that could change over the next few years as demand for renewable energy rises. Similarly, demand for biodiesel is growing as well, with 1.8 billion gallons of biodiesel being produced in 2020. Texas, the state with the most diesel consumption of any state, and the second most vehicle miles traveled, after California, is the nation’s leading consumer of biodiesel.
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A number of factors are accelerating the rise of renewable diesel and biodiesel, but ultimately, they all have one thing in common: these fuels are more environmentally responsible fuel choices than conventional petroleum fuels.
One reason renewable diesel and biodiesel are considered more sustainable is that they’re not fossil fuels. Instead of being made from crude oil extracted from the ground, like petroleum diesel, they are produced from sustainable sources like animal fat, corn oil and soybean oil that can be used and grown again. In addition to being made of renewable feedstocks, these fuels also turn waste products into usable energy.
When renewable diesel is used, it burns cleaner than regular diesel, releasing less carbon and potentially reducing CO2 emissions by up to 100%, depending on the blend, compared to petroleum diesel. Biodiesel can reduce emissions by up to 86% when compared with petroleum diesel.
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Federal and State Incentives to Use Low-Carbon and Renewable Fuels
An example of a federal program that encourages the use of renewable diesel and biodiesel is the Renewable Fuel Standard (RFS). This national policy requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels. Two of the fuels that fall into this standard are renewable diesel and biodiesel.
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An example of a state program requiring the use of low-carbon and renewable fuels is the California Low-Carbon Fuel Standard (LCFS). This program is designed to decrease the carbon intensity of California’s transportation fuel pool and provide more low-carbon and renewable alternatives to reduce petroleum dependency and improve air quality. This encourages both the use and production of low-carbon fuels like renewable diesel.
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Drop-In Fuels Offer a Jump Start on ESG Goals
Increasing awareness of the impacts of climate change is prompting more companies and municipalities to find ways to reduce their environmental impact. Making environmentally minded choices about transportation fuels is one way to cut GHG emissions, but some of those options require infrastructure that can take time to establish. Because drop-in fuels like renewable diesel and biodiesel can be used with existing vehicles and fueling infrastructure, there’s no wait to start working toward ESG goals.
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Municipalities like San Francisco, Oakland, Sacramento, and San Diego, California, have already made the switch to renewable diesel. Well-known names like UPS and Google are adopting it, too.
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Some traditional fuel producers are retooling petroleum refineries to produce renewable diesel instead.
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As more renewable diesel and biodiesel is made, producers must find a way to bring in feedstocks like tallow, corn oil, soybean oil and other waste agricultural products to make it.
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Which Transportation Mode Is Best for Shipping Feedstocks, Renewable Diesel and Biodiesel?
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Truck is an option, but it doesn’t offer the volume advantages that pipelines do. Because one train can carry up to three hundred trucks’ worth of product, rail can easily handle large volumes of renewable diesel, biodiesel and feedstocks at a time. That means companies and municipalities bringing in renewable diesel and biodiesel by train can ship large volumes while also taking advantage of financial incentives. Typically, rail also offers a lower cost per ton mile compared to truck.
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Trains also offer their own environmental advantages. On average, U.S. freight railroads can move one ton of freight more than 480 miles per gallon of fuel, making them 3-4 times more fuel efficient than trucks.
