Renewable diesel production is expected to overtake biodiesel production in the United States in October, according to the U.S. Energy Information Administration.
“We’re seeing continued growth on the renewable diesel side and stagnation to slight shrinkage on the biodiesel side,” Mindi Farber-DeAnda, team lead of petroleum and natural gas modeling at the EIA, said during a recent podcast hosted by Biodiesel Magazine.
Renewable diesel capacity was estimated at 1.92 billion gallons per year in May, up from 1.75 billion gallons in January.
Biodiesel capacity was estimated at 2.22 billion gallons, down from 2.26 billion gallons. Canadian canola is now approved as a feedstock for both types of fuel.
The Canola Council of Canada estimates that the U.S. biofuel market could consume up to 6.5 million tonnes of Canadian canola annually by 2030, up from 1.8 million tonnes today.
Most of that growth in demand is expected to come from renewable diesel. The EIA has already prepared an article for when renewable diesel overtakes biodiesel production. It expects to publish it this October.
Many traditional oil refineries are being converted into renewable diesel plants. The EIA estimates that 440,000 barrels per day were converted to renewable diesel in 2020.
Farber-DeAnda thought there would be even more in 2021 but that didn’t happen as oil companies put off conversions due to the economic impact from COVID.
But she anticipates that another 660,000 barrels per day will be converted in 2022.
Farber-DeAnda said the EIA’s long-term outlooks for renewable diesel have been “very vanilla” because they fail to properly account for government policies, which are the real drivers of growth for the sector.
“We tend to flatline the long-term outlooks, so you don’t see a huge run-up in renewable diesel in our outlooks,” she said.
But the EIA is making changes in 2023. It will incorporate the Environmental Protection Agency’s latest Renewable Fuel Standard volume obligations in its outlooks.
It will also finally be incorporating Oregon’s Clean Fuels Program into its outlooks. California’s Low Carbon Fuel Standard has been part of the outlooks for a number of years.
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