IEA sees renewable diesel production doubling by end-2025

In Washington, the International Energy Agency says U.S. production capacity for renewable diesel could more than double from current levels by the end of 2025, based on several announcements for projects that are either under construction or could start development soon.

Two factors behind growing U.S. renewable diesel capacity are rising targets for state and federal renewable fuel programs and biomass-based diesel tax credits. The Inflation Reduction Act of 2022 extended the biomass-based diesel tax credits through 2024. The IEA estimates U.S. renewable diesel production capacity was 170,000 barrels per day (b/d), or 2.6 billion gallons per year (gal/y), at the end of 2022. Although we expect some announced projects will be delayed or canceled, if all projects begin operations as scheduled, U.S. renewable diesel production capacity could reach 384,000 b/d, or 5.9 billion gal/y, by the end of 2025.