In Washington, the Energy Information Administration says that last year, U.S. West Coast distillate 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. Renewable diesel has a growing share of the region’s diesel fuel market because clean-fuel programs have provided incentives for consuming it.
In January 2022, U.S. renewable diesel consumption surpassed biodiesel consumption for the first time and has continued to increase since then. Renewable diesel consumption has grown relative to biodiesel consumption because:
· Renewable diesel receives more credits under the RFS program than biodiesel.
· Petroleum refiners can convert their units to produce renewable diesel instead of petroleum products.
· Renewable diesel plants are larger than biodiesel plants and can take advantage of economies of scale.
· Renewable diesel can be blended in any concentration and performs better in the cold than biodiesel.
· Renewable diesel can be transported through the same pipelines as petroleum diesel.
Almost all of the country’s renewable diesel fuel is consumed in California, according to EIA estimates. Much of the renewable diesel not consumed in California is consumed in other states with clean fuel programs, such as Oregon and Washington. All three states are part of the U.S. West Coast region.
