Biodiesel and renewable diesel net supply to California has increased since the launch of the state’s Low Carbon Fuel Standard (LCFS) in 2011, according to the latest statistics from the US Energy Information Administration (EIA).
The quarterly net supply of renewable diesel for Q2 2018 was approximately 100.5 million gallons. By comparison, the net supply for the same period 2011 was approximately 357,000 gallons. A particularly dramatic surge in renewable diesel supply occurred between Q2 2012 and Q2 2013, rising from approximately 723,000 gallons to more than 23 million gallons.
A similar though less dramatic jump has also been seen for biodiesel supply to the Golden State. In Q2 2011 the figure stood at around 2.6 million gallons, while by the same period this year it had reached 40.6 million gallons, or 4.7% of the net diesel supply.
According to EIA, renewable diesel shares the same fat, oil, and grease feedstocks as biodiesel, but can be blended into petroleum diesel at higher blend levels compared with biodiesel blends. Renewable diesel is often produced either through hydrotreating at a biorefinery or co-processing at a petroleum refinery.
One of the most striking observations from the latest EIA figures is the percentage with which both renewable diesel and biodiesel have increased as a share of California’s net diesel mix. In Q2 2011, biodiesel made up only 0.29% of the net diesel supply while in Q2 2018 it was 4.7%. Renewable diesel was only 3.97% in Q2 2011, compared to 11.73% of the net diesel supply in Q2 2018.
Administered by the California Air Resources Board, the LCFS sets standards to incrementally decrease the carbon intensity of motor gasoline and diesel fuel by at least 10% by 2020 relative to a 2010 baseline.
Billions pouring in
“Low carbon fuel standards on the US West Coast have already had an explosive impact on investment across North America and the wider international arena,” Matthew Stone, managing director at low carbon fuel and feedstock price and benchmarking agency PRIMA, told Biofuels International.
“With California embarking on a 50% expansion in its low carbon intensity transport fuel mandate next year and nearby Oregon tipping into a carbon deficit for the first time this year, investors are already pouring billions of dollars into refinery scale production facilities.,” Stone continued.
As Biofuels International reported previously, more biodiesel and renewable diesel producers are being attracted to California. In February 2018, Western Iowa Energy reopened the idled Agron Bioenergy facility in Watsonville, with company president Brad Wilson saying at the time that the LCFS at made California “the epicentre of for biodiesel demand.”
“According to proprietary PRIMA data, the US renewable diesel footprint will expand more than six fold by 2021 from installed capacity of just over 1mn t this year, as investments already worth around $3.5bn gain shape,” Stone told Biofuels International.
“Planned low carbon fuel demand growth at the state and Federal level coupled with competing demand growth overseas will compound the need for asset investments to keep the supply side in balance going forward.”
This article was written by Daryl Worthington, editor of Biofuels International