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Sail Away - Supply/Demand Imbalances Will Make the U.S. a Leading Exporter of RD and SAF

U.S. production of renewable diesel (RD) is rising fast and production of sustainable aviation fuel (SAF) will soon follow suit, driven largely by federal and state incentives. But U.S. demand for both RD and SAF is growing at a more measured pace, mostly because they are throttled by a number of other governmental policies, including the level of blending mandates set by the Environmental Protection Agency (EPA). As we see it, the net effect of this disconnect between domestic supply and demand will be the U.S. becoming a net exporter of RD this year and a net exporter of SAF in 2025 — but only after a spike in SAF imports in 2023-24. Yes, it’s complicated, but with public-sector policies impacting both sides of the supply/demand scale, did you really expect it wouldn’t be? In today’s RBN blog, we look at two more energy products the U.S. will be exporting.

This is the fourth blog in our series about crude oil and product exports, where we’re looking at what’s driving the increased flows of U.S.-sourced hydrocarbons to export terminals and overseas markets. The first three episodes — Calling the Shots, Sooner or Later, and Houston Bound — focused on crude oil exports, which have been ramping up since the long-standing ban on most crude exports was lifted more than seven years ago. Way back then, RD and SAF weren’t really on anyone’s radar — but they sure are now.

Before we dive into what’s ahead for RD and SAF imports and exports, let’s do a quick-as-we-can review of what RD and SAF are, how they’re produced, and what’s driving their fast-increasing production. (If you’re familiar with all that, skip ahead to the “RD and SAF Imports and Exports” subhead a few paragraphs below.)

RD and SAF Basics

RD and SAF not only provide lower-carbon, renewable-based alternatives to petroleum-based diesel and jet fuel, respectively, they are also the chemical twins of those widely used fuels and therefore can serve as “drop-in” replacements for them. Further, RD and SAF (like traditional diesel and jet) have similar — but not identical — chemical makeups, with the specs for SAF (like jet fuel) reflecting the special needs of jet engines and jet aircraft (such as a very low freeze point). As you’d guess, the processes for producing RD and SAF also rhyme — a general design for both typically reacts a renewable feedstock (such as vegetable oil, waste cooking oil, animal fats, etc.) with hydrogen (H2) at high pressure over a reactor filled with catalyst. After the reactor, the liquid hydrocarbons are separated from unreacted hydrogen and water and then fed into a lower-pressure fractionation system and distilled into refinery intermediates (see our Come Clean series for more).

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