The landscape for U.S. renewable diesel production has changed dramatically, similar to the growth of ethanol and biodiesel in the past two decades, according to a report from USDA’s Foreign Agricultural Service. Federal and state policies aimed at reducing emissions have driven this growth, significantly impacting both domestic and international feedstock markets. Renewable diesel, produced from renewable feedstocks like vegetable oils and animal fats, can be blended at higher levels and transported using existing pipelines.
Renewable diesel production has led to increased imports of fats and oils, such as canola oil, which surged after EPA recognized it as a qualifying feedstock for renewable diesel. This has driven up U.S. imports of canola oil from Canada, and imports of other feedstocks like used cooking oil (UCO) have also increased significantly.
The boom in renewable diesel has also altered U.S. soyoil and meal exports. High domestic demand for soyoil has made U.S. exports uncompetitive, leading to a sharp decline in exports. Conversely, the abundance of soymeal from increased crush has boosted U.S. meal exports, even amidst reduced competition from Argentina due to drought.
Looking ahead, the expansion of renewable diesel production will depend on federal and state policies, feedstock availability and sustained U.S. soymeal export gains. The Producer’s Tax Credit and California LCFS will continue to drive demand for lower carbon-intensity feedstocks, influencing U.S. import demand for fats and oils.
