Renewable diesel consumption in the U.S. hit 28 million barrels in 2021, according to the Energy Information Administration (EIA). However, the only states to consume the renewable fuel were California and Oregon, with California burning up 99% of the consumption rate.
California’s staggering diesel uptake could be due to the state’s Low Carbon Fuel Standard (LCFS).
In 2011, the state of California enacted the LCFS to encourage cleaner fuel consumption through rebates to paying customers. At the time of the legislation’s passage, California consumed 1 million barrels of renewable diesel. From 2011 to 2021, that volume increased from 1 million barrels to 28 million barrels.
While California is capable of producing roughly 3 million gallons of renewable diesel in-state, as was produced in 2021, it has a track record of importing—out-of-state and from Singapore, especially—to meet demand.
Renewable diesel is chemically equal to petroleum diesel and similar to biodiesel but is made, transported and used differently than biodiesel, according to EIA. Renewable diesel can be moved via pipelines and sold without blending with petroleum diesel, unlike biodiesel.
Few U.S. states, including North Dakota, Louisiana, California, Wyoming, Washington and Kansas, produce all U.S. renewable diesel, with Louisiana leading the production race at 46% of the total. These states each have contracts with California to push fuel to the state’s pumps.
These U.S. consumption and capacity rates are projected to continually increase, based on EIA’s estimates.
Keeping up with California’s demand, EIA forecasts U.S. renewable diesel capacity could more than double by 2025, adding a boost to domestic production. The administration also anticipates the same trajectory for renewable diesel consumption.
