WASHINGTON – The Department of Energy predicts renewable diesel production could more than double by the end of 2025.
That’s based on several announcements for projects that are either under construction or could start development soon.
The DOE reported that U.S. renewable diesel production reached 2.6 billion gallons in 2022, and by the end of 2025 they think production could reach 5.9 billion gallons a year.
During a webinar hosted by the Northern Crops Institute, market analyst Mike Krueger talked about the expanding renewable diesel market which includes diesel production in the Northern Plains.
Similar things are happening in Canada as it relates to canola and building out renewable diesel capacity.
Krueger said the developing situation could present future opportunities in the sunflower industry, as well.
Given the push towards renewable diesel and an increase in vegetable oil production and consumption, Krueger said it’s going to create more competition for acres in the Dakotas and Canadian Prairies.
“We’ll see great competition eventually, I think, as canola and sunflower – and the soybean market responds to a higher demand for oil,” Krueger said. “If that pushes prices, it means that farmers are going to have more alternatives and more competition rather than just corn, wheat, and regular soybeans. So, it’s going to have an impact eventually.”
A number of factors are fueling renewable diesel’s fast growth. In a recent study on renewable diesel, the University of Illinois reported that production “is booming, driven by federal and state policies, including the Low Carbon Fuel Standard in California.”
Major energy companies, including BP, Chevron, Marathon, Phillips 66 and Shell, have announced or already added renewable diesel production to a growing line-up of carbon-cutting fuels.
Last month, Chevron Corp announced it’s collaborating with agribusiness firms Corteva Inc and Bunge Ltd to produce renewable fuels from winter canola hybrids in the southern United States.
