Playin' by the Rules - Regulations Spark a Bevy of U.S. Renewable Diesel Projects

Production of alternative, non-petroleum-based fuel continues to be a hot topic around the globe as government policies have incentivized or even mandated these products with the aim of reducing greenhouse gas emissions. In the U.S., we’ve seen waves of ethanol and biodiesel enter the fuel supply chain, but the latest commodity that has piqued industry interest is renewable diesel, whose chemical characteristics make it a particularly desirable replacement for conventional distillate. Today, we provide an overview of the renewable diesel market, the legislative programs in North America that are incentivizing its production, and the projects currently on the books to produce it.

What Is Renewable Diesel?

Renewable diesel is similar to biodiesel in that it can be produced from lipids — typically vegetable oil, waste cooking oil, animal fats, etc. However, the production processes for the two fuels are different, leading to important differences in their chemical structures. Renewable diesel is most commonly produced through hydrotreating the feedstock, while biodiesel is produced through transesterification, a process that turns the lipids into fatty acid methyl esters (FAME) — and a great word to remember for Scrabble. We won’t bog you down with a complex description of those two processes, but the important thing to remember is that each of the resulting fuels has distinct properties that allow them to be blended differently with petroleum-based diesel. Biodiesel is subjected to lower blending limits (typically 5-20%; lower in colder climates) due to its cold-flow properties — i.e., its flow behavior at low temperatures — that can lead to plugging, or restricted flows, in vehicle fuel systems. By contrast, renewable diesel is chemically similar to petroleum-based diesel and can therefore be used as a direct “drop-in” substitute that is not subject to similar blending limits.

Regulatory Programs

Renewable diesel production and consumption are expected to grow significantly over the next few years due to increasing legislative requirements, including the U.S. Renewable Fuel Standard (RFS); the Low Carbon Fuel Standard (LCFS) in California, Oregon and British Columbia; and the newly proposed Canadian Clean Fuels Standard (CCFS).

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