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Released October 07, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Just a few years ago, the U.S. renewable diesel market was a flicker on the energy horizon. Since then, it has become one of the fastest-growing segments of a rapidly diversifying Alternative Fuels Industry. The U.S. Department of Energy (DoE) projects renewable diesel will account for roughly 7% of the overall diesel pool by 2030--which is a sizable portion, given the many energy sources now in play. Industrial Info is tracking more than $5.6 billion worth of biodiesel or renewable diesel projects nearing or under construction in the U.S., with nearly 60% of that amount attributed to just three projects in Texas and Louisiana.
While the U.S. currently produces fewer than 1 billion gallons per year of renewable diesel, the U.S. Energy Information Administration (EIA) believes it could reach 5 billion gallons by 2024, based on state and federal targets for renewable fuel, favorable tax credits, and the ongoing conversion of many petroleum refineries into renewable diesel refineries. "Renewable diesel" and "biodiesel" often are used interchangeably, but the difference is subtle: Renewable diesel can be blended into petroleum diesel at any level, while biodiesel can only be blended at rates between 2% and 20% of diesel fuel by volume, according to the EIA.
Click on the image at right for a graph detailing the top 10 U.S. states for biodiesel or renewable diesel projects nearing or under construction, by total investment value.
Diamond Green Diesel LLC, a subsidiary of Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas), is investing more than $2.5 billion to add renewable diesel capacity at two of its largest plants in Texas and Louisiana. Construction started in third-quarter 2019 on the $1.1 billion expansion of the "Super Diamond" unit at the renewable diesel plant in Norco, Louisiana, which uses recycled animal fats, used cooking oil and inedible corn oil as feedstock. Site preparation began earlier this year for a $1.45 billion renewable diesel plant at Valero's complex in Port Arthur, Texas.
The Norco expansion will add 400 million gallons per year of renewable diesel and 50 million to 60 million gallons per year of renewable naphtha to the facility, while the new Port Arthur unit will produce 470 million gallons per year of renewable diesel and 40 million gallons per year of renewable naphtha. Subscribers to Industrial Info's Global Market Intelligence (GMI) Alternative Fuels Project Database can read detailed project reports on the Norco and Port Arthur projects.
Renewable Energy Group Incorporated (Ames, Iowa) is preparing to kick off a $825 million upgrade and expansion of its renewable diesel plant in Geismar, Louisiana, which will increase the site's production capacity from 90 million gallons to 340 million gallons, while improving operational reliability and logistics. The project, which is expected to be fully operational in early 2024, was bolstered last year by an incentive package from the state of Louisiana that included comprehensive workforce support and tax incentives. Subscribers can learn more from Industrial Info's detailed project report.
"With the board approval of the Geismar expansion and improvement project, we now expect to spend approximately $100 million more in capital related to the Geismar project by the end of 2021," said Craig Bealmear, the chief financial officer of Renewable Energy Group, in a recent quarterly conference call with analysts. Bealmear said that, in addition to the capacity additions, the investments would "improve our rail-handling capability, as well as give us more logistical access closer to the facility."
California, which is the biggest gasoline market in the U.S., bolstered its role in the renewable fuels market through the California Low-Carbon Fuel Standard (LCFS), which has offered incentives for the production of lower-carbon fuels for more than a decade. This has not been without opposition: Some California-based environmental activists have pointed out that the production of renewable diesel requires heavy amounts of hydrogen to treat feedstocks like soybean oil and animal fats, which can cause flaring events, refinery malfunctions and unsafe emissions, according to Reuters.
Nonetheless, many renewable diesel producers see plenty of opportunity in California's incentives. Global Clean Energy Holdings Incorporated (Torrance, California) recently started construction on a $365 million renewable diesel plant in Bakersfield. Global Clean Energy will retool a shuttered refinery, previously owned by Delek US (NYSE:DK) (Brentwood, Tennessee), to produce 15,000 barrels per day of renewable diesel from multiple feedstocks, including crop waste, used cooking oil, soybean oil and distillers corn oils. Subscribers can learn more from Industrial Info's project report.
Subscribers to Industrial Info's GMI Project Database can click here for a full list of biodiesel or renewable diesel projects nearing or under construction in the U.S.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
While the U.S. currently produces fewer than 1 billion gallons per year of renewable diesel, the U.S. Energy Information Administration (EIA) believes it could reach 5 billion gallons by 2024, based on state and federal targets for renewable fuel, favorable tax credits, and the ongoing conversion of many petroleum refineries into renewable diesel refineries. "Renewable diesel" and "biodiesel" often are used interchangeably, but the difference is subtle: Renewable diesel can be blended into petroleum diesel at any level, while biodiesel can only be blended at rates between 2% and 20% of diesel fuel by volume, according to the EIA.
Click on the image at right for a graph detailing the top 10 U.S. states for biodiesel or renewable diesel projects nearing or under construction, by total investment value.Diamond Green Diesel LLC, a subsidiary of Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas), is investing more than $2.5 billion to add renewable diesel capacity at two of its largest plants in Texas and Louisiana. Construction started in third-quarter 2019 on the $1.1 billion expansion of the "Super Diamond" unit at the renewable diesel plant in Norco, Louisiana, which uses recycled animal fats, used cooking oil and inedible corn oil as feedstock. Site preparation began earlier this year for a $1.45 billion renewable diesel plant at Valero's complex in Port Arthur, Texas.
The Norco expansion will add 400 million gallons per year of renewable diesel and 50 million to 60 million gallons per year of renewable naphtha to the facility, while the new Port Arthur unit will produce 470 million gallons per year of renewable diesel and 40 million gallons per year of renewable naphtha. Subscribers to Industrial Info's Global Market Intelligence (GMI) Alternative Fuels Project Database can read detailed project reports on the Norco and Port Arthur projects.
Renewable Energy Group Incorporated (Ames, Iowa) is preparing to kick off a $825 million upgrade and expansion of its renewable diesel plant in Geismar, Louisiana, which will increase the site's production capacity from 90 million gallons to 340 million gallons, while improving operational reliability and logistics. The project, which is expected to be fully operational in early 2024, was bolstered last year by an incentive package from the state of Louisiana that included comprehensive workforce support and tax incentives. Subscribers can learn more from Industrial Info's detailed project report.
"With the board approval of the Geismar expansion and improvement project, we now expect to spend approximately $100 million more in capital related to the Geismar project by the end of 2021," said Craig Bealmear, the chief financial officer of Renewable Energy Group, in a recent quarterly conference call with analysts. Bealmear said that, in addition to the capacity additions, the investments would "improve our rail-handling capability, as well as give us more logistical access closer to the facility."
California, which is the biggest gasoline market in the U.S., bolstered its role in the renewable fuels market through the California Low-Carbon Fuel Standard (LCFS), which has offered incentives for the production of lower-carbon fuels for more than a decade. This has not been without opposition: Some California-based environmental activists have pointed out that the production of renewable diesel requires heavy amounts of hydrogen to treat feedstocks like soybean oil and animal fats, which can cause flaring events, refinery malfunctions and unsafe emissions, according to Reuters.
Nonetheless, many renewable diesel producers see plenty of opportunity in California's incentives. Global Clean Energy Holdings Incorporated (Torrance, California) recently started construction on a $365 million renewable diesel plant in Bakersfield. Global Clean Energy will retool a shuttered refinery, previously owned by Delek US (NYSE:DK) (Brentwood, Tennessee), to produce 15,000 barrels per day of renewable diesel from multiple feedstocks, including crop waste, used cooking oil, soybean oil and distillers corn oils. Subscribers can learn more from Industrial Info's project report.
Subscribers to Industrial Info's GMI Project Database can click here for a full list of biodiesel or renewable diesel projects nearing or under construction in the U.S.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
