CoBank says renewable diesel investment surge likely to drive growth and energy transition

In Colorado, by producing fuel using sources with lower carbon intensity than traditional petroleum-based products, the U.S. biofuels sector is well-positioned to play a major role in reducing greenhouse gas emissions. According to a new report from CoBank’s Knowledge Exchange, the recent surge of investments in U.S. renewable diesel production capacity is likely to ignite a period of growth and transition for the biofuels industry.

As major oil companies have begun embracing renewable diesel, U.S. production is expected to increase exponentially. Several industry stakeholders have announced plans for new soybean crush and refinery facilities over the last two years. Soybean oil is the feedstock most commonly used for producing renewable diesel. Combined, the proposed crush and refinery projects would increase U.S. renewable diesel production capacity six-fold by 2030 to 6.5 billion gallons annually.

However, the expected growth in soybean oil-based renewable diesel requires considerably more soybean bushels for domestic crush. CoBank estimates that U.S. soybean acreage would need to increase by 17.9 million acres to fill the supply gap created by the additional crush and refinery projects that have been announced. Additionally, the U.S. would need to stop exporting whole soybeans.