Markets
Renewable Diesel
Rising
A projected spike in renewable diesel production, partnered with rising corn oil prices, presents a market opportunity for ethanol producers. By Susanne Retka Schill
PHOTO: STOCK
Energy Corp., which both have ethanol assets, biodiesel producers Renewable Energy Group and World Energy, and petroleum refiners CVR Energy Inc., HollyFrontier Corp. and Phillips 66. The hydrocarbon produced from renewable diesel is Renewable diesel capacity is poised to ex- nearly identical to petroleum diesel, a big advantage. It hanplode in the next few years. Biodiesel Magazine, dles the same, can be pipelined and has no blending limitaEthanol Producer Magazine’s sister publication, tion. Nearly all renewable diesel, however, is blended with reports that at the end of 2020 there were four conventional diesel in order to qualify for the on-again/ off-again blenders tax credit. The $1 per-gallon blenders tax renewable diesel facilities in operation with a to- credit is a major part of the equation driving biobased diesel tal capacity of 553 MMgy. Six more facilities are either (a term that encompasses both biodiesel and renewable dieexpanding or under construction for an additional 2 billion gal- sel) growth. But it’s certainly not the only factor. lons of capacity—a four-fold increase due to come online within a year or two. On top of that, at least five more projects are pro- Demand Drivers posed. Altogether, the 15 facilities represent 5.5 billion gallons of “I see it as a RIN play for some of the really big guys,” potential new renewable diesel capacity, double the U.S. biodiesel says Bill Pracht, CEO of East Kansas Agri-Energy. With a industry’s current size. 4 MMgy renewable diesel plant colocated with EKAE’s 48 Players in the large-scale oil refinery retrofits and new builds MMgy ethanol plant in Garnett, Kansas, Pracht follows marinclude familiar names like Marathon Petroleum and Valero ket developments closely.
28 | ETHANOL PRODUCER MAGAZINE | MAY 2021
