-June 24,2022-
Renewable fuels are becoming a larger part of California’s transportation fuels market, as shown by recent announcements to invest in renewable fuel production made by several California petroleum refineries. This shift to renewable fuels is being driven by government incentives. According to the EIA, renewable diesel production capacity could represent 20 percent of total diesel production on the West Coast by 2024.
The transition is painful however with California diesel fuel prices near $7 a gallon now – an all time high.Just in recent days prices are heading down. But more production – particularly renewable diesel – is expected soon, says the California Energy Commission.
Renewable fuels are different than fossil fuels in that they are made from renewable resources. Most renewable fuels are produced through a combination of raw materials feedstocks. Examples of renewable fuels that support internal combustion engines include ethanol, biomethane, biodiesel, and renewable diesel.
But only renewable diesel is chemically equivalent to petroleum diesel and can be used in any concentration in a diesel engine. Biodiesel can only be mixed up to 10 percent with petroleum diesel because in higher concentrations it can cause problems in engines and may void vehicle warranties. According to Neste, the world’s largest producer of renewable diesel, benefits of renewable diesel include that it withstands cold and storage much better than biodiesel, is higher quality for the engine, and provides the greatest reduction in air emissions.
While there is growth occurring in the biodiesel market, renewable diesel is one of the fastest growing low-carbon fuels in California’s transportation fuels market.
Consumption of renewable diesel reached record levels of more than 937 million gallons consumed in 2021, representing 25 percent of total diesel consumption in California, some of it imported. California uses about 3.7 billion gallons of all kinds of diesel annually.
California Diesel Consumption shows consumption by type in California.Blue is renewable diesel
Now there are four refineries in California that are transitioning to renewable fuels.By 2024 the volume of renewable diesel should reach over 2 billion gallons. So by then there should be 6.6 billion gallons produced of all types of diesel-almost double what California consumes.
Adding that new supply should help bring down average diesel prices and therefor shipping costs for everything brought be truck to your town as well as farm use.
The Energy Commission expects more conversion of trucks away from diesel as well, including electric and hydrogen power trucks increasing “demand destruction “for diesel -one of the worst polluting fuels helping to choke the air with particulates.