But diesel is different. Renewable diesel can be a straight substitute for conventional fossil diesel. And so, it has all of diesel’s energy value and street value, before considering the value of the carbon attributes. So, in the vase of renewable diesel, you add those benefits to calculate the market value — in the base of unique renewable fuels like biodiesel and ethanol, carbon values are bundled into the market wholesale price.
So, you get quite a bit of value. It’s lower in LCFS value than cellulosic ethanol because it is great, but not quite as great as cellulosic on carbon reduction. But those RIN values are almost as spectacular — that’s because you get 1.7 RINs for every gallon of renewable diesel, because of the higher energy value. And that’s gold for the economics.
In all, renewable diesel has a value right now approaching $1.90 for the energy value, $0.40 for the California LCFS credits (depending on the maker and the process, it can vary), and $1.28 for the RINs. That’s $3.58 per gallon, and that’s excluding the possibility of a $1.01 per gallon tax credit – which was recently awarded for 2017 but is still up in the air for 2018.
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