By Sean Pratt
Published: September 1, 2022
The Canola Council of Canada expects most of the increased demand for Canadian canola from American biofuel producers by 2030 will come from renewable diesel. | Getty Images
The American government expects biofuel producers to be making more renewable diesel than biodiesel by this fall.
Renewable diesel production is expected to overtake biodiesel production in the United States in October, according to the U.S. Energy Information Administration. “We’re seeing continued growth on the renewable diesel side and stagnation to slight shrinkage on the biodiesel side,” Mindi Farber-DeAnda, team lead of petroleum and natural gas modelling at the EIA, said during a recent podcast hosted by Biodiesel Magazine. Renewable diesel capacity was estimated at 1.92 billion gallons per year in May, up from 1.75 billion gallons in January.
Biodiesel capacity was estimated at 2.22 billion gallons, down from 2.26 billion gallons.
Canadian canola is now approved as a feedstock for both types of fuel.
The Canola Council of Canada estimates that the U.S. biofuel market could consume up to 6.5 million tonnes of Canadian canola annually by 2030, up from 1.8 million tonnes today.
Most of that growth in demand is expected to come from renewable diesel. The EIA has already prepared an article for when renewable diesel overtakes biodiesel production. It expects to publish it this October.
Many traditional oil refineries are being converted into renewable diesel plants. The EIA estimates that 440,000 barrels per day were converted to renewable diesel in 2020.
Farber-DeAnda thought there would be even more in 2021 but that didn’t happen as oil companies put off conversions due to the economic impact from COVID.
But she anticipates that another 660,000 barrels per day will be converted in 2022.
Farber-DeAnda said the EIA’s long-term outlooks for renewable diesel have been “very vanilla” because they fail to properly account for government policies, which are the real drivers of growth for the sector.
“We tend to flatline the long-term outlooks, so you don’t see a huge run-up in renewable diesel in our outlooks,” she said.
But the EIA is making changes in 2023. It will incorporate the Environmental Protection Agency’s latest Renewable Fuel Standard volume obligations in its outlooks.
It will also finally be incorporating Oregon’s Clean Fuels Program into its outlooks. California’s Low Carbon Fuel Standard has been part of the outlooks for a number of years.
“The big news for us is representation finally for sustainable aviation fuel,” said Farber-DeAnda.
So instead of reporting about biomass-based diesel, there will be separate categories in a number of reports for biodiesel, renewable diesel and other biofuels, which includes sustainable aviation fuel.
“Providing that additional transparency is just so long overdue,” she said.
The EIA is also trying to figure out what feedstocks are being used to make the various types of biofuels.
“Our feedstock data isn’t as ready for primetime yet, but we’re hoping to get that soon to a place where we’ll feel confident reporting that,” said Farber-DeAnda.
She added that the EIA has detailed data on biofuel imports, right down to the companies involved and the ports where it enters the U.S.
But for export data, it is relying on census information and other sources.
She acknowledged that a major error recently occurred with biodiesel exports for January 2022. That error cannot be modified until the Petroleum Supply Annual publication is released in August 2023.
Another problem is that renewable diesel exports are lumped under the same code as regular diesel.
She also noted that the International Energy Outlook does not contain a renewable diesel outlook.
“My goal is to eventually get us there, but I don’t think it’s going to happen this year,” said Farber-DeAnda.
READ THE FULL ARTICLE HERE: https://www.producer.com/news/b-c-funds-renewable-diesel-project/