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Is the renewable diesel boom over?
An ag economist says U.S biodiesel expansion projects will likely remain on hold unless new policies incentivize more demand.
Scott Irwin with the University of Illinois tells Brownfield new processing capacity has increased biodiesel production to more than four billion gallons over the past five years.
“A couple of years ago, we might have been projecting, let’s say by 2025 or 2026, we’d be over maybe seven billion gallons of capacity with all the projects amounts, but there’s been a real pulling back and putting a pause on a lot of those projects,” he explains.
Irwin says increases to Renewable Volume Obligations under the U.S. Renewable Fuel Standard or other policies like continued support of sustainable aviation fuels are needed for those expansions to continue.
“I’m skeptical that many of those plants will actually be built—much is going to turn on the Trump administration’s policy regarding the RFS,” he shares.
He says the previous Trump administration was not friendly to renewable fuel expansion which leaves a lot of questions for the sector.
“That’s going to be really interesting to see if that’s a replay or if it’s different now because the big investors in these renewable diesel plants are in fact the energy refiners, by and large,” he says.
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