Report highlights demands on soybean industry from US renewable diesel growth
According to a new report from CoBank’s Knowledge Exchange titled “Renewable Diesel Projected to Turbo Charge Biofuel Growth,” the recent surge of investments in U.S. renewable diesel is set to grow production capacity more than six-fold by 2030.
“Renewable diesel offers the most exciting growth opportunity in the biofuels space with proposed total capacity rising from approximately 1 billion gallons of annual production in 2021 to 6.5 billion gallons by 2030—equating to about 15 percent of the petroleum diesel market today,” the report states.
Several new soybean-crush facilities have been announced in the past few years, as soybean oil is the most common feedstock for U.S. renewable diesel production.
However, the expected growth in soybean oil-based renewable diesel requires considerably more soybean bushels for domestic crush, according to CoBank.
To accommodate such massive growth in renewable diesel production this decade, 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,” the CoBank report states.
Additionally, the U.S. would need to stop exporting whole soybeans, according to the report.
“CoBank estimates that alternatives to a massive shift of acres from corn to soybeans would include growing other oilseeds like canola and sunflower on a larger scale, importing other vegetable oils, or using other feedstocks such as beef tallow to produce renewable diesel fuel,” the company stated in a Sept. 28 press release promoting the report.
Biofuel production has grown nearly 8 percent every year over the past 15 years, according to CoBank, driven by tax credits and targeted government programs, including the federal Renewable Fuel Standard program and California’s Low Carbon Fuel Standard.
“The Inflation Reduction Act of 2022 will increase usage of renewable energy in general, and biofuels in particular,” CoBank stated.
Kenneth Scott Zuckerberg, lead grain and farm supply economist for CoBank, said, “Renewable diesel offers the most intriguing opportunity in the biofuels space, given the extraordinary growth potential.”
Click here to read the report.
