EIA: US renewable diesel capacity could more than double through 2025
US production capacity for renewable diesel could more than double from current levels by end-2025, based on company reports on projects that are either under construction or could start development soon, the US Energy Information Administration (EIA) said.
Two factors behind growing US renewable diesel capacity are rising targets for state and federal renewable fuel programs and biomass-based diesel tax credits. The Inflation Reduction Act of 2022 extended the biomass-based diesel tax credits through 2024. EIA estimates US renewable diesel production capacity was 170,000 b/d, or 2.6 billion gallons per year (gal/y), at end-2022. While some projects might be delayed or canceled, if all projects begin operations as scheduled, US renewable diesel production capacity could reach 384,000 b/d, or 5.9 billion gal/y, by end-2025.
Renewable diesel is a fuel that is chemically equivalent to petroleum diesel and nearly identical in its performance characteristics. Renewable diesel has some of the highest greenhouse gas (GHG) reduction scores among existing fuel pathways in programs such as the federal Renewable Fuel Standard (RFS), the California Low-Carbon Fuel Standard (LCFS), the Oregon Clean Fuels Program, and the Washington State Clean Fuels Program.
Investment in new renewable diesel production capacity in the US has grown significantly because of renewable diesel’s interchangeability with petroleum diesel in existing petroleum infrastructure and because of government incentives. In 2022 and early 2023, the following eight renewable diesel refineries began production:
- CVR Energy’s plant in Wynnewood, Okla.
- Diamond Green Diesel’s plant in Port Arthur, Tex.
- HollyFrontier’s plant in Artesia, NM.
- HollyFrontier’s plant in Cheyenne, Wyo.
- Montana Renewables’ plant in Great Falls, Mont.
- New Rise Renewables’ plant in Reno, Nev.
- Seaboard Energy’s plant in Hugoton, Kan.
- Shell’s plant in Norco, La.
An average of 520,000 b/d of distillate fuel oil was consumed on the West Coast in 2021. The region, which is also the largest renewable diesel importing region in the US, could soon meet the majority of its distillate fuel needs from renewable diesel by 2025 if domestic renewable diesel capacity does increase as scheduled, EIA said.