US renewable diesel production capacity could more than double by the end of 2025 due to new projects either underway or planned, according to a report by the US Energy Information Administration (EIA).
The increase in US renewable diesel capacity was driven by rising targets for state and federal renewable fuel programmes and biomass-based diesel tax credits, the 2 February ‘Today in Energy’ report said.
The Inflation Reduction Act of 2022 extended biomass-based diesel tax credits until 2024.
US renewable diesel production capacity was 170,000 barrels/day (bpd), or 2.6bn gallons/year at the end of last year, the EIA said.
“Although we expect some announced projects will be delayed or cancelled, if all projects begin operations as scheduled, US renewable diesel production capacity could reach 384,000 bpd, or 5.9bn gallons/year, by the end of 2025,” the report said.
Eight new renewable diesel refineries started production either in 2022 or earlier this year: CVR Energy’s plant in Wynnewood, Oklahoma; Diamond Green Diesel’s plant in Port Arthur, Texas; HollyFrontier’s plant in Artesia, New Mexico; HollyFrontier’s plant in Cheyenne, Wyoming; Montana Renewables’ plant in Great Falls, Montana; New Rise Renewables’ plant in Reno, Nevada; Seaboard Energy’s plant in Hugoton, Kansas and Shell’s plant in Norco, Louisiana.
The new projects scheduled to begin operations could lead to renewable diesel contributing to a greater share of West Coast diesel consumption, the report said.
“Most renewable diesel in the USA has historically been consumed on the West Coast, where producers can take advantage of both Renewable Identification Number (RIN) credits from the Renewable Fuel Standard (RFS) and state credits from one of the state renewable fuel programmes,” the report said.
An average of 520,000 bpd of distillate fuel oil was consumed on the West Coast last year, according to the EIA.
“The region, which is also the largest renewable diesel importing region in the USA, could soon meet the majority of its distillate fuel needs from renewable diesel by 2025 if domestic renewable diesel capacity does, in fact, increase as scheduled,” the report said.