Working Paper

Potential biomass-based diesel production in the United States by 2032

Alternative fuels

The U.S. Environmental Protection Agency considers the availability of feedstocks for fuel production when determining the yearly volume obligations under the Renewable Fuel Standard. The amount of biomass-based diesel (BBD) that can be produced in the United States without increasing diversion effects on other uses should be one of the crucial factors that the agency considers in future volume rulemakings. This study provides insights for the EPA in setting future volumetric obligations for BBD as well as advanced biofuel and total renewable fuel categories.

The total potential BBD production from the seven most common feedstocks for biomass-based diesel production in the United States is projected to increase by about 16 million gallons, or 1% a year from 2018 to 2032. The amount of BBD that could be produced from domestically available fats, oils, and greases will be 1.84 billion gallons in 2020, increasing to 1.97 billion gallons in 2032, a 13% increase compared with 2018.

The projected volume in 2032 of 1.97 billion gallons of BBD that could be produced from domestically available feedstocks is even smaller than the 2020 and 2021 BBD obligation of 2.43 billion gallons specified by the EPA. The gap between BBD availability and the RFS-driven volumes might be even higher as additional BBD could be needed to meet the advanced biofuel obligation, reflecting pressure from the ethanol blend wall. Continued increases in BBD and advanced biofuel volume obligations are likely to add pressure to domestic BBD feedstock markets, leading to price increases and feedstock switching.

The overall impact of higher obligations could thus result in significant GHG emissions from the production of low-cost substitute feedstocks. Furthermore, obligated parties in the United States would need to increase imports of BBD feedstocks, or BBD, or both to meet higher obligations. Thus, setting BBD volumes low would enable RFS to meet its stated intention of reducing GHG emissions and improving national energy security.

Figure 2. Feedstock inputs to biodiesel production in the United States.