California's strict emissions reduction standards boost renewable diesel demand - EIA

More than a decade-old efforts to cut California's reliance on fossil fuels have helped make the Golden State virtually the only consumer of renewable diesel in the US despite low domestic production, EIA data shows.

PHOTO: Biodiesel pump inthe US. National Biodiesel Board

California implemented a Low Carbon Fuel Standard (LCFS) in 2011, setting annual Carbon Intensity (CI) limits for transportation fuels that have become progressively stricter. These limits have incentivised use of fuels with lower carbon emissions, and more renewable fuel alternatives, over fossil fuels.

California also mandates blending of biofuels into traditional fossil fuels to lower their CI, and this makes it the only state to offer rebates to customers for buying renewable diesel.

Renewable diesel consumption in California has grown from a small base of 1 million bbls in 2011, when the LCFS was enacted, to more than 28 million bbls in 2021, EIA data shows. This increased uptake of renewable diesel has also helped the state displace petroleum-based distillate fuel oil, the EIA reported last month.

The California LCFS programme's success has often led to calls from other states and the federal government to implement similar programmes. Oregon, which has mandated petroleum diesel to be blended with biodiesel or renewable diesel since 2016, was the only other US state to consume renewable diesel in 2021, although its usage was just 300,000 bbls.

Washington has also mandated biofuels or renewable diesel blending starting this year.

Most of the renewable diesel consumed in California was produced in other states, like Louisiana, or imported, mostly from Singapore, the EIA says. California produced just 3.3 million bbls of renewable diesel itself in 2021, out of the total 20.5 million bbls produced in the US in that year.

By 2025, the EIA expects US renewable diesel production to more than double. The agency also expects a steady increase in consumption of the alternative fuel over the next few years.

By Debarati Bhattacharjee

Please get in touch with comments or additional info to news@engine.online