University of Illinois analysts looked into the future of renewable diesel production in the U.S. and saw some headwinds. Renewable diesel production capacity has exploded in recent years, increasing by more than three billion gallons. This substantially impacted fats and oils feedstock markets. However, the profitability of renewable diesel has taken a hit in the last year. The industry began to produce at levels greater than the demand ceiling set by the annual renewable volume obligations under the Renewable Fuel Standard. Farmdoc Daily says the bloom is off the renewable diesel boom that began in 2021. There’s a list of announced building projects that could add substantial production capacity in the future. However, none of these projects have broken ground and started construction. “Until there is confirmation of actual construction activity, it’s prudent to exclude the announced projects in projecting renewable diesel production capacity for 2027 or later,” the Farmdoc experts added.
Updated estimates of renewable diesel through 2026
