Renewable diesel is made from fats, oils and grease feedstocks then produced through hydrotreating (isomerization), gasification, pyrolysis, and other thermochemical and biochemical means. Rather than being blended into traditional diesel, such is biodiesel, it can be used as a stand-alone product. Currently, renewable diesel production in the United States is limited, with most of it imported from Singapore. As of 2018, there were four commercial renewable diesel plants with a combined capacity of 356 million gallons.
As companies search for transportation-related emission reductions in either scope 1 or scope 3 categories, renewable diesel presents a value proposition inclusive of fewer greenhouse gas emissions. This is represented through a carbon intensity score that can be 85% lower than traditional diesel, depending on feedstock source. It can also reduce NOx emissions by 10%.
As a drop-in fuel for traditional diesel vehicles with similar fuel economy, this alternative fuel doesn’t require new vehicles or vehicle modifications, significantly shortening the conversion process. It is compatible with existing diesel fueling stations, although few carry it today and features odorless characteristics, appreciated by operators and maintenance technicians. Unlike biodiesel, it doesn’t freeze as easily and therefore performs well in cold conditions.
From a cost perspective, renewable diesel qualifies as a renewable fuel under the federal Renewable Fuel Standard, California’s Low Carbon Fuel Standard and Oregon’s Clean Fuels Program, which were all created to expand clean fuel solutions and reduce transportation-related emissions. The fuel continues to expand as part of the solution to California’s transportation-related emission problem.
Renewable diesel is expensive to produce and without government financial incentives, can be difficult to justify. Further, as noted above, production facilities are limited in the United States, and to expand, require significant capital investment.
Depending on the feedstock used to produce the fuel, another set of environmental concerns potentially emerge. Palm oil used in some production is tied to issues like deforestation and destruction of local habitats. As companies consider true environmental impact of renewable diesel – feedstock sourcing should be factored into the overall sustainability value.
Renewable diesel offers attractive benefits as fleets seek non-diesel and further, non-fossil fuels. Given it’s a drop-in fuel for diesel vehicles, offers low carbon intensity scores and comes with the ability to obtain government financial credits, its use presents a strong case for change. However, in states outside California the fuel cost may be prohibitive for many fleets.