Renewable diesel fuel, which is a popular option for more sustainable transportation, is a fast-growing industry in the U.S. Consumption of renewable diesel has risen from just a million or so barrels in 2011 to over 28 million barrels in 2021. That growth, according to the U.S. Energy Information Administration (EIA), is largely due to domestic production closely meeting that demand at 21 million barrels produced in 2021.
Yet nearly all of the consumed renewable diesel is shipped to and consumed in only one U.S. state: California. Nearly all 28 million barrels of renewable diesel was consumed there with only a tiny fraction (1 percent) being used in CA neighbor Oregon.
Most of the fuel being consumed was produced in Louisiana, but other states such as Kansas, North Dakota, Washington, and Wyoming are also large producers of renewable diesel. California itself produces at about the same level as Wyoming at roughly 8 percent of total production nationally.
Most of the drivers for renewable diesel, which is made as biofuel from oil-producing plants such as soybeans, involve government requirements. California’s Low Carbon Fuel Standard went into effect in 2011, where production and consumption were at about 1 million barrels.
LCFS rules require transportation fuels to be mixed with biofuels to lower carbon intensities. California also offers rebates to consumers using renewable diesel fuels.
The EIA expects renewable diesel production to more than double by 2025 as diesel fuel prices stay high, making renewable diesel competitive outside of California’s mandated market.
