In January 2023, US production capacity of renewable diesel and other biofuels reached 3 billion gallons per year (gal/y), surpassing its biodiesel production capacity for the first time, according to the US Energy Information Administration (EIA). The growth is attributed to rising targets set by state and federal renewable fuel programs, as well as the renewal of biomass-based diesel tax credits.
“We began collecting data about US capacity of renewable diesel and other biofuels in 2021," EIA said. "Since 2021, renewable diesel and other biofuels production capacity has more than tripled in the US. Over the same period, biodiesel capacity has declined 13%. Renewable diesel is a fuel that is chemically equivalent to petroleum diesel and nearly identical in its performance characteristics. The same is not true of biodiesel, which is chemically different from petroleum diesel.”
According to EIA, nationally, the total biofuels production capacity, encompassing renewable diesel, biodiesel, ethanol, and other biofuels, reached 23 billion gal/y as of January 2023. This marks a 6% increase in total production capacity compared to January 2022. Notably, fuel ethanol accounted for 78% of US biofuel production capacity, while renewable diesel and other biofuels contributed to 13%, with biodiesel comprising the remaining 9%.
Between January 2022 and January 2023, the US production capacity for producing renewable diesel and other biofuels increased by 1.25 billion gal/y, a 71% increase from 2022. In January 2023, 11 states reported sites with renewable diesel and other biofuels production capacity, up from 6 states in 2022.
“An example of a state with new and growing capacity is Texas, which had no renewable diesel and other biofuels capacity in January 2022. By January 2023, Texas had 537 million gal/y of capacity, the second highest after Louisiana. Unlike ethanol and biodiesel, where states in the Midwest hold most of the national capacity, more than 60% of US renewable diesel and other biofuels production capacity is on the Gulf Coast,” EIA said.
Biodiesel now accounts for the smallest share of US biofuels capacity, 2.1 billion gal/y in January 2023. Biodiesel capacity declined by 169 million gal/y from January 2022 to January 2023. The Midwest has 70% of US biodiesel capacity, which is primarily in Iowa, Missouri, Illinois, and Indiana.
Fuel ethanol producers in the Midwest continue to hold the most capacity in the US biofuels market. Fuel ethanol capacity increased by 283 million gal/y between 2022 and 2023. More than 90% of US ethanol capacity is in the Midwest, where the feedstocks for ethanol (primarily, corn) are grown, mainly in Iowa, Nebraska, Illinois, and South Dakota.
