Navigating the Future of Low-Carbon Liquid Fuels: An All-of-the-Above Approach

Written on: January 9, 2024 by Paul J. Nazzaro

As renewable diesel makes its much-anticipated arrival on the East Coast, it is important to remain committed to energy diversity by embracing the benefits and availability of both biodiesel and renewable diesel, as well as recognizing the synergies created by combining the two fuels together.

As decarbonization takes center stage in the transportation, rail, marine and home-heating sectors, the pursuit of low-carbon liquid fuels has gained immense momentum. Biodiesel and renewable diesel, two prominent alternatives to conventional diesel, offer compelling advantages in terms of carbon reduction and immediate availability. However, to effectively decarbonize these sectors, an all-of-the-above approach, embracing both biodiesel and renewable diesel, is not just an option but a necessity.

A baseline overview of these super-low carbon options designed to decarbonize the markets that you serve can be summed up as follows: Biodiesel is produced through transesterification, a simple process that reacts fat or oil with a small amount of alcohol to produce a finished fuel. Alternatively, renewable diesel is produced through hydrotreating, a process similar to a traditional refinery operation. This high-heat, high-pressure process produces a fuel that is chemically indistinguishable from conventional diesel. Both are “drop-in” fuels that can be used in all engines and equipment up to 20%, and many up to 100% if managed properly for storage and transportation situations requiring cold-flow parameter observations. Renewable diesel can be used in all engines and equipment up to 100%.

Biodiesel is nontoxic and biodegradable, and both biodiesel and renewable diesel are ultra-low sulfur and have no aromatics. Biodiesel is for engines (due to its improved lubricity compared to ultra-low sulfur diesel fuel) while both biodiesel and renewable diesel contribute to a higher performance due to their higher cetane values. When it comes to ASTM standards, biodiesel does have its own specification managing properties under ASTM D6751, while all blends of renewable diesel, including 100%, are incorporated into ASTM D975, the conventional diesel-fuel specification.

The combination of biodiesel and renewable diesel produces a cost effective, full replacement option for petroleum diesel. As a paired fuel, biodiesel and renewable diesel optimize petroleum displacement and cost, as well as help reduce particulate matter, carbon and nitrogen-oxide.

Biodiesel: A Pioneer in Carbon Reduction
Derived from renewable resources such as vegetable oils and animal fats, biodiesel has established itself as a frontrunner in carbon reduction. Often exceeding 50% in carbon reduction (compared to conventional diesel), biodiesel’s immediate availability and compatibility with existing infrastructure make it an attractive choice for rapid decarbonization efforts. Additionally, biodiesel enhances lubricity, reducing engine wear and tear, and contributes to improved air quality by lowering particulate matter emissions.

Renewable Diesel: A Seamless Integration
Renewable diesel has emerged over the past several years as a drop-in solution, seamlessly replacing conventional diesel without requiring modifications to existing engines or infrastructure. Its chemical identity to petroleum diesel ensures compatibility with existing equipment, making it an appealing choice for transportation, rail and marine applications. Moreover, renewable diesel offers higher energy density and lower exhaust emissions, making it a powerful tool in the decarbonization arsenal.

Synergy in Action: Biodiesel & Renewable Diesel
The combination of biodiesel and renewable diesel presents a synergistic partnership. Biodiesel’s immediate availability and infrastructure compatibility complement renewable diesel’s drop-in compatibility and enhanced performance. This strategic pairing allows for maximum, immediate and effortless decarbonization.

The Value of Early Action
The urgency to decarbonize transportation and other sectors cannot be overstated. Carbon reductions achieved today hold greater value than those achieved in the future, as they directly mitigate the accumulation of greenhouse gases in the atmosphere. Embracing low-carbon liquid fuels, including biodiesel and renewable diesel, enables immediate action, preventing further damage to the environment and paving the way for a more sustainable future.

Feedstock Landscape Outlook
The production of biodiesel and renewable diesel relies on a diverse range of feedstocks, including vegetable oils, animal fats and recycled cooking oil. With projections indicating a demand of six billion gallons per year (BGY) by 2030 and 15 BGY by 2050, securing sustainable and abundant feedstocks is crucial. Sustainable feedstock options include:

• Soybean oil: Currently the primary feedstock for biodiesel production in the U.S., soybean oil offers a readily available and scalable source of feedstock.
• Waste and recycled oils: Used cooking oils from restaurants and other sources, along with trap and sewer greases, represent valuable sources of feedstock that reduce waste and contribute to circular-economy principles.
• Algae: With its high oil content and ability to grow in non-arable land and seawater, algae holds immense potential as a sustainable feedstock for biodiesel and renewable diesel production.
• Camelina oil: A low-input cover crop that thrives in harsh climates, camelina offers a promising complement to soybean oil, increasing oil output from the same fertile land and offering the potential for productivity from fallow land.

The Role of Distributors
Transportation, rail, marine and home-heating liquid-fuel distributors play a pivotal role in facilitating the transition to low-carbon liquid fuels. By collaborating with producers, promoting the adoption of these fuels and investing in infrastructure, distributors can accelerate decarbonization efforts and pave the way for a cleaner, more sustainable future.

An All-Inclusive Approach
At the risk of redundancy, I would like to re-emphasize an important point: An all-of-the-above approach, encompassing both biodiesel and renewable diesel, represents the most comprehensive and effective strategy for decarbonizing the home heating, transportation, rail and marine sectors. By embracing these low-carbon liquid fuels, we can capitalize on the immediate benefits of carbon reduction, secure sustainable feedstock sources and empower distributors to drive the transition to a cleaner, more sustainable future.

It would be irresponsible to suggest just one of these fuels should be the “singular” solution for a sustainable, judicious decarbonization strategy. A quick look at distillate consumption reveals all one needs to know about which fuel is the right fuel—the answer is both.

A 60 BGY distillate demand will not be satisfied by either biodiesel or renewable diesel for a variety of reasons. First, the obvious challenges are feedstock availability and valuation volatility. Second, there is fierce competition from policy-driven markets, including regions with low-carbon fuel standards, demanding a vast majority of current production. The rapid Government-backed emergence of sustainable aviation fuel (SAF) will also compete for these finite feedstock sources.

Astounding amounts of capital have been invested into building domestic biodiesel markets. These biodiesel producers are a valuable resource to the supply chain for countless reasons, the most important of which now is that they can offer us supply where and when we need it. As we welcome greater availability of renewable diesel on the East Coast with much anticipation, it is important to not forget what biodiesel continues to bring to the table—the myriad engine, economic, environmental, energy and national-security benefits it has provided the U.S. for more than 30 years.

For years now, as electrification has increased in market share across a variety of sectors, we have pushed the sound idea that governments and society must not put all their eggs in one energy basket. It would be foolish to abandon that position now. Deciding to embrace only one type of low-carbon liquid fuel in any decarbonization strategy while idling the other would compromise our supply picture for decades to come. Energy diversity is an intelligent approach to a sustainable future for you and your customers. ICM