California Consumes Nearly All U.S. Renewable Diesel, Despite Minimal Local Production

US: Although California consumes almost all the country's renewable Diesel, much of it isn't produced there. More than eight times as much renewable Diesel was consumed in California in 2021 as it was produced. Instead, most of the renewable Diesel used in California was made in other states or imported, primarily from Singapore.

Chemically identical to petroleum Diesel, renewable Diesel is a liquid biofuel that can be added to or used in place of Diesel fuel in cars. Although Biodiesel is more prevalent than renewable Diesel, the two fuels have different chemical compositions and methods of production, transportation, and use. Renewable Diesel, in contrast to Biodiesel, may be shipped via petroleum pipelines and sold at retail outlets without being blended with conventional fuel. It is frequently generated at petroleum refineries that have already been built but have been modified to produce biofuels instead of petroleum products.

Following the implementation of California's Low Carbon Fuel Standard (LCFS) in 2011, the state's consumption of renewable fuel increased significantly. Over the five-year period between 2011 and 2021, consumption increased by more than 18 times, from 1 million barrels to 28 million barrels annually.

The California LCFS mandates that biofuels be blended with transportation fuels used in the state to reduce their carbon intensity. Only California provides a refund to consumers who explicitly purchase renewable Diesel, boosting the use of renewable Diesel in the state as it becomes more cost-competitive with Biodiesel. Different Biodiesel regulations and incentives exist in other states.

In 2021, Oregon was the only other state to use renewable Diesel, but its consumption made up less than 1% of the national total. To be marketed in Oregon, petroleum Diesel fuel must be blended with either Biodiesel or renewable Diesel. Washington likewise started mandating petroleum fuel to be blended with Biodiesel or renewable Diesel starting in 2023, although it didn't disclose any usage of renewable Diesel in 2021.

All renewable Diesel produced in the US in 2021 was produced in six states: Louisiana, North Dakota, California, Wyoming, Washington, and Kansas. Numerous facilities outside of California are bound by exclusive contracts to deliver all the renewable Diesel they produce to distributors there.

Since 2011, Louisiana has produced the most renewable Diesel, thanks to its extensive petroleum infrastructure. In 2021, Louisiana produced more than 9 million barrels of renewable Diesel, or around 46% of the nation's total production. The United States' highest renewable Diesel production capacity is a facility in Norco, Louisiana, with a daily capacity of around 64,000 barrels.

By 2025, the capacity of the United States' renewable Diesel industry might more than treble, increasing domestic production. Over the coming years, production and consumption of renewable Diesel are both anticipated to increase in the US.