While the vast majority of biodiesel in the United States continues to fuel trucks and other vehicles, a notable trend is emerging: increased utilization of the renewable fuel in residential, commercial, and electric power sectors. Newly published estimates from the U.S. Energy Information Administration’s (EIA) State Energy Data System reveal this diversification in biodiesel consumption, marking a shift from previous assessments that primarily focused on transportation.

Biodiesel, a fuel derived from fats, oils, and greases, is typically blended with conventional petroleum diesel. In 2023, the transportation sector accounted for approximately 95% of the nearly 46 million barrels of biodiesel consumed nationwide, solidifying its position as the dominant consumer. However, the remaining 5% signifies a growing adoption of biodiesel in other areas.

A significant portion of this non-transportation use is attributed to the heating oil market. Biodiesel can be blended with heating oil to provide a more sustainable heating solution for homes and businesses. EIA estimates indicate that the combined residential and commercial sectors consumed nearly 5% of the total U.S. biodiesel in 2023, a substantial increase from the roughly 1% recorded a decade prior.

This growth is largely driven by the implementation of biofuel blending mandates for heating oil in several northeastern states. New York, Connecticut, and Rhode Island have enacted state-wide minimum blend requirements, compelling fuel suppliers to incorporate biodiesel into their heating oil. While biodiesel likely sees some use in heating applications in other states, the EIA currently only provides consumption estimates for these three pioneering states.

New York stands out as the largest non-transportation consumer of biodiesel, accounting for 57% of the U.S. total for the residential and commercial sectors in 2023. New York City spearheaded this movement with the nation’s first law mandating a minimum 2% biodiesel blend in heating oil, which took effect in 2012. Subsequently, New York State implemented a 5% minimum state-wide blend in 2022, with further increases scheduled to 10% in 2025 and 20% in 2030. The U.S. Census Bureau data from 2023 shows that nearly 16% of New York homes rely on heating oil as their primary heat source, significantly higher than the national average of about 4%.

Connecticut and Rhode Island have followed suit with similar state-wide minimum biofuel blend laws for heating oil. Connecticut’s 5% mandate began in 2022 and will progressively increase to 50% by 2035. Rhode Island was the first to enact such a law, starting with a 5% blend in 2017 and reaching 10% in 2023, with a further rise to 50% planned for 2030. Notably, heating oil is a more prevalent heating source in these states, with over 34% of homes in Connecticut and 26% in Rhode Island using it as their primary heat in 2023.

Beyond heating, biodiesel also sees limited use in electricity generation, accounting for less than 1% of the total U.S. consumption in 2023. A test plant in Tennessee first reported biodiesel use for electric power in 2006. Since 2009, Hawaii has been responsible for nearly all the biodiesel consumed for electricity generation in the U.S. In 2023, petroleum fueled approximately 68% of Hawaii’s electricity generation, the highest share among all states, while biodiesel contributed an estimated 1% to the state’s power mix.

This emerging trend of increased biodiesel use outside of transportation highlights the fuel’s potential to contribute to decarbonization efforts across various sectors of the U.S. economy. The blending mandates in the Northeast serve as a model for how policy can drive the adoption of renewable fuels in heating applications, while niche uses in power generation demonstrate biodiesel’s versatility. As states continue to explore strategies for reducing their carbon footprint, the role of biodiesel in residential, commercial, and electric power sectors may see further expansion.