BTC

Renewable diesel is a popular topic in the transportation fuel space, and for good reason. For one, RD provides a lower-carbon, renewable-based alternative to petroleum-based diesel; for another, it’s a chemical twin of and therefore a “drop-in” replacement for ultra-low sulfur diesel. But, most of all, there are the large financial incentives provided by California’s Low Carbon Fuel Standard, the U.S. Renewable Fuel Standard, the U.S. Biodiesel Tax Credit, and other programs, which can make RD production highly profitable. Driven by these factors, there’s a lot of renewable diesel production capacity under construction or on the drawing board: everything from greenfield projects to expansions of existing RD refineries to conversions of old-school refineries so they can make RD. Today, we put the spotlight on RD and discuss how it differs from biodiesel, how it’s produced, and the new RD capacity coming online in North America.

Biodiesel has long constituted a small but stable portion of the diesel fuel diet in North America, its production being driven primarily by the U.S. Renewable Fuel Standard and Biodiesel Income Tax Credit (BTC). Produced from a variety of feedstocks, including soybean oil, corn oil, animal fats, and used cooking oils, biodiesel offers a low “carbon intensity,” or CI — a big plus in California and other jurisdictions with low carbon fuel regulations. The incentives for producing biodiesel are substantial, but there are two big catches with the fuel: a limited supply of feedstocks and properties limiting how much can be blended with petroleum-based diesel. Today, we continue our series on low carbon fuel standards with a look at biodiesel’s pros, cons, history, and prospects.