From January to April 2021, diesel consumption (specifically distillate fuel oil) in California, Washington, and Oregon plummeted to around 400,000 barrels per day. Distillate fuel oil is a refined petroleum product primarily used as diesel fuel.

This year’s diesel usage is currently 18% lower than the previous year’s average and a significant drop from the 450,000 barrels per day recorded in 2000.

The West Coast’s drive towards renewable energy sources is reshaping the region’s fuel landscape, signaling a monumental shift away from traditional diesel and towards sustainable alternatives.

“Last year, U.S. West Coast distillate [diesel] consumption, as measured by product supplied, was at its lowest since 2002 and is on track to fall further this year. The growing use of biofuels instead of petroleum diesel is the primary cause for the decline,” EIA, an arm of the U.S. Department of Energy, noted July 10.

Biofuels, such as biodiesel and renewable diesel, are emerging as viable alternatives to traditional diesel and are playing a crucial role in meeting emission requirements set by California, Oregon, and Washington. However, according to the Energy Information Administration (EIA), the rest of the country is experiencing a rise in diesel consumption back to pre-pandemic levels.

The EIA highlights that renewable diesel is gaining traction in the diesel fuel market on the West Coast due to the incentives provided by clean-fuel programs. In fact, California consumes almost all of the renewable diesel produced in the United States.

Both renewable diesel and biodiesel can replace traditional diesel fuel. Renewable diesel, which has the same chemical composition as petroleum-based diesel, is made from fats, vegetable oils, or greases. On the other hand, biodiesel, while derived from the same feedstocks, is chemically different and blended with diesel.

According to the EIA, renewable diesel has outpaced biodiesel in usage since January 2022. This is because renewable diesel can be blended in any concentration and performs better in cold temperatures compared to biodiesel. Additionally, renewable diesel can be transported through existing petroleum diesel pipelines, and petroleum refineries can be converted to produce larger quantities of renewable diesel.

The total number of biofuel stations in the United States is 1,885, comprising 1,312 biodiesel stations and 573 renewable diesel stations, as per the EIA data. California leads with 570 renewable diesel stations and 45 biodiesel stations. Meanwhile, Washington has 21 biodiesel stations and no renewable diesel stations, whereas Oregon has 31 biodiesel stations and only three for renewable diesel.

Overall, the shift towards biofuels is gaining momentum, especially on the West Coast, where incentives and advancements in renewable diesel are driving the transition away from traditional diesel.

Both biodiesel and renewable diesel are part of the U.S. Environmental Protection Agency’s Renewable Fuel Standard program. This program mandates that transportation fuel in the country must meet renewable requirements. However, renewable diesel has a slight advantage over biodiesel as it receives slightly more credits in the program.

Paul Winters, the public affairs and federal communications director at Clean Fuels Alliance America, which represents renewable organizations, is not surprised by the West Coast’s growing preference for biofuel over diesel.

“The California and Oregon low-carbon fuel programs have been very successful in displacing petroleum with better, cleaner fuels. In California, renewable diesel and biodiesel now make up more than 45% of the state’s diesel fuel pool. And in Oregon, these fuels make up 14% of the diesel market. These states represent a considerable part of the nation’s diesel market, so it’s not surprising that there’s now a recognizable impact on market data,” Winters said.

He also noted that the EPA’s finalized Renewable Fuel Standard rule for 2023, 2024, and 2025 received criticism for neglecting to consider the industry’s growth and impact. This has sparked a significant backlash from biofuel interests, particularly agricultural states, as the rule sets lower levels that contradict both current and future production levels and growth potential.

“The final biomass-based diesel volumes in the volumes simply don’t match the volumes available in the market,” Winters said. “It’s also apparent that EPA failed to understand the change in EIA reports, recategorizing refinery input adjustments as renewable product supplied. In the final rule, EPA decided to adjust EIA’s reported volumes of gasoline and diesel by 3.5%. This mechanism did not appear in the proposal — there was no opportunity for public comment. It’s possible that they would not have taken that step if they had consulted with EIA on this change in data reports.”

The Energy Information Administration (EIA) has revised their outlook on U.S. renewable diesel production due to the recent renewable fuel ruling by the Environmental Protection Agency (EPA). Although the forecast for growth in renewable diesel production has been reduced, the EIA still anticipates an increase in production, reaching 219,000 barrels per day by 2024. This projection is 2.8% lower than the previous estimate prior to the EPA’s ruling. Currently, the U.S. is producing 161,000 barrels per day of renewable diesel for this year.

Source: Transport Topics

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“By expanding the availability of homegrown biofuels, we are strengthening our energy independence, creating new market opportunities and revenue streams for American producers, and bringing good-paying jobs and other economic benefits to rural and farm communities,” Vilsack said.

The U.S. Department of Agriculture plans to allocate up to $500 million from President Joe Biden’s Inflation Reduction Act to drive the production of greener fuel in the United States.

The USDA’s Higher Blends Infrastructure Incentive Program (HBIIP) will be the main funding mechanism. This program supports rural projects that increase the output of ethanol and biodiesel made from American agricultural products.

To encourage facilities to switch to higher-blend fuels, grants will cover up to 75% or $5 million of total project costs. The fuels must have an ethanol content of more than 10% and a biodiesel content of more than 5%.

Starting from July 1, a total of $450 million will be available. This includes $67.5 million for transportation fueling facilities, such as fueling stations and freight transportation facilities, and $18 million for fuel distribution facilities, including terminal operations and depots. The application period will span five different periods between July 1 and September 30, 2024.

In December, 59 infrastructure projects received $50 million from the HBIIP funds. California secured the most projects, with 21 worth $7.7 million, followed by Minnesota with 17 projects awarded $8.6 million. Iowa came in third place, with eight projects receiving $2.1 million.

California continues its strong commitment to reducing transportation emissions with a focus on increasing the availability of ethanol and biodiesel at fuel pumps. In fact, 81% of the federal funding awarded to the state is dedicated to expanding biodiesel supplies manufactured and distributed within California.

AltAir Paramount, LLC, a fuel distributor, is the recipient of a $1.5 million grant. This grant will support the sale of an additional 10 million gallons of biodiesel from Elk Grove, California, located near major transportation routes. The funding will be used to enhance infrastructure, including upgrading spill protection, installing new pumps and piping, and improving storage tanks and truck loading facilities.

Crimson Renewable Energy, the largest biodiesel producer on the West Coast based in Denver, also received a grant of over $399,521. This funding will enable the expansion of biodiesel sales by 30.4 million gallons annually at their Bakersfield plant in California. The grant will be used to establish the necessary infrastructure, including a blending skid with two loading bays and an in-house blending system.

Amidi Petroleum Inc. received a portion of a $520,248 grant to enhance renewable fuel sales. This includes replacing biodiesel dispensers and storage tanks at a fueling station in Los Gatos, Santa Clara County, to accommodate the growing demand for renewable fuels.

Additional grants were awarded to cities such as Carmichael, Fontana, San Jose, and Snelling to further support biodiesel production and sales in California.

Minnesota’s push for renewable energy just received a major boost with a record-breaking $2.2 million grant awarded to Northern Fuel and Convenience Inc. The funds will be used to create a robust infrastructure that will aid in the sales and use of biodiesel and ethanol in the state. As part of the initiative, 17 B20 biodiesel dispensers and 13 biodiesel storage tanks will be installed at 10 fueling stations across Minnesota.

Sizable grants are also being allocated to spur biodiesel production in the Northeast as well. New Hampshire-based Sprague Operating Resources will receive a generous $1.2 million grant to expand biodiesel sales by 34 million gallons annually. This will involve retrofitting fuel storage tanks for biodiesel and incorporating state-of-the-art rack blending equipment in key locations such as the Bronx in New York and East Providence, R.I.

Fuel distributor Carmel Terminals Inc. of New York has also secured a significant $1 million grant to improve its infrastructure and increase annual biodiesel sales by 16 million gallons. The company is preparing to commission a cutting-edge system in New York that will improve the way biodiesel is distributed and sold.

Even travel plazas are getting in on the action. BP Kenosha Travel Plaza in Wisconsin has been awarded a grant of $259,853 to enhance their facilities and boost biodiesel sales by 1 million gallons annually.

Meanwhile, the Route 63 Travel Plaza Inc. in Chester, Iowa, is set to receive $310,750 to upgrade their ethanol and biodiesel storage tanks and replace outdated ethanol dispensers. These improvements will increase annual biofuel sales by 73,311 gallons.

In the South, Down to Earth Energy LLC of Monroe, Georgia, has secured a grant of $62,708 to upgrade their fueling stations. This will involve replacing and installing B20 biodiesel dispensers, resulting in a increase of 21,960 gallons in biodiesel sales each year.

These grants and initiatives highlight the growing commitment to renewable energy across the United States.

Source: Transport Topics

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Instead of solely relying on electrification, they advocate for immediate emissions reductions through renewable diesel and biodiesel options already available in the market.

“The enormous practical and logistical challenges associated with electrifying trucks necessitate that the agency not rely entirely on a prodigious pace of heavy-duty electrification to decarbonize the trucking sector,” the organizations wrote in public comments submitted to EPA. “Instead of depending on one technology to act as a silver bullet, the agency should adopt an agnostic approach to low-carbon technologies that can deliver substantial emissions savings in the heavy-duty sector, without compromising the market’s ability to gravitate toward electrification as it becomes commercially viable and practical at scale.”

The EPA’s proposed rule for off-highway refueling locations requires dozens of fast chargers to support 25% of long-haul trucks being electric by 2032. However, the charging capacity needed at a single large truck stop would be equal to that of a small town, creating concern among fuel retailers about the feasibility and scalability of electric charging infrastructure within 10 years.

To enable a more efficient move away from petroleum alternatives and towards electric vehicles, policy incentives must align with transportation energy providers. Electric vehicle technology and associated refueling networks can continue to develop with sensible tailpipe emissions and strong incentives for renewable liquid fuels.

Fuel retailers have a proven track record of reducing carbon emissions in the commercial trucking sector with renewable diesel and biodiesel. These scalable technologies have already removed more than 18 million tons of CO2 in California alone between 2011 and 2019. Compared to petroleum-based diesel, biofuels can reduce greenhouse gas emissions by up to 75%.

To further reduce emissions, the fuel retailing sector has urged the EPA to increase the blending mandate for biodiesel and renewable diesel under the Renewable Fuel Standard and Congress to eliminate preferential treatment for sustainable aviation fuel. By prioritizing investments in currently scalable technologies that have already proven their efficacy, we can make significant strides in reducing our carbon footprint for ground transportation.

Source: CCJDigital

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