<p>(L-R) Richard Battersby, City of Oakland, Calif.; Pat O&rsquo;Keefe, Golden Gate Petroleum; and Neville Fernandes from Neste are pictured after the City of Oakland announced its switch to renewable diesel. <em>Photo courtesy of City of Oakland</em></p>

What is renewable diesel? The short answer is it’s a fuel that is chemically similar to petroleum diesel, but is 100% renewable and sustainable. In other words, it’s the latest, greenest diesel on the market. But to really understand it, it’s helpful to back up and understand the difference between it and its predecessors, petroleum diesel and biodiesel. Here’s a rundown:

Petroleum Diesel: Conventional (petroleum-based) fossil fuels are made from crude oil — hydrocarbons, organic compounds, and small amounts of metal from millions of years ago. To make fossil-based fuels such as petroleum diesel, crude oil is removed from the ground, pumped into a refinery, and refined through a heat- and pressure-based process called hydrogenation.   

Biodiesel: Unlike petroleum diesel, biodiesel does not rely on fossil fuels. Instead, it is made from vegetable oils and/or animal fats, which are renewable. It is also processed differently than petroleum diesel, using a process called transesterification. This process introduces oxygen into the fuel, which can cause issues with freezing temperature, separation during storage, algae growth, and higher emissions. Biodiesel is generally blended with petroleum diesel at a 5% to 20% ratio.

Renewable Diesel: Like biodiesel, renewable diesel is not a fossil fuel. Instead, it is made of nonpetroleum renewable resources such as natural fats, vegetable oils, and greases. “Renewable diesel, much like biodiesel, is derived from waste agricultural products, particularly waste vegetable oils and waste animal fats,” said Allen Schaeffer, executive director of the Diesel Technology Forum. “As long as we grow soybeans and produce livestock, the waste derived after these products have been processed into food can be refined into a clean, low-carbon fuel.” 

Renewable diesel differs from biodiesel, however, in how it’s processed. Renewable diesel is processed similar to the way petroleum diesel is produced, which makes it chemically the same as petroleum diesel. That means a few things:

  1. Because it’s hydrogenated, renewable diesel doesn’t contain ­oxygen, and therefore users will not encounter the challenges biodiesel presents relating to freezing temperature and storage.
  2. Thanks to hydrogenation, renewable diesel also burns cleaner than biodiesel.
  3. Because it has the same chemical structure as petroleum diesel, renewable diesel can be used in engines that are designed to run on conventional diesel fuel — with no blending required.

<p>Renewable diesel burns cleaner than regular diesel, releasing less carbon, as shown in this photo. <em>Photo courtesy of Eugene Water &amp; Electric Board</em></p>

Fleet Experience with Renewable Diesel

Renewable diesel comes with a number of benefits: It’s made of renewable sources, it burns clean, and it works just like traditional diesel. Fleets making the switch won’t encounter performance issues, nor will they need to modify equipment or fueling infrastructure to adopt the fuel.

Schaeffer said fleets that have turned to renewable diesel have done so as part of a low-cost strategy to meet sustainability goals. “Renewable diesel fuel can allow fleets to substantially reduce carbon emissions and petroleum use, and improve air quality without sacrificing power, ­performance, or driving range.”

The City of Oakland, Calif., was one of these fleets. When renewable diesel became available commercially in northern California, the city seized the opportunity.

“At first, renewable diesel seemed like a ‘too good to be true’ cost-neutral way to achieve our goals.  But renewable diesel gives you the ability to convert your entire diesel-­powered fleet to alternative fuel overnight,” said Richard Battersby, CAFM, CPFP, assistant director for the city's public works agency. “When the product became available through a local supplier at a very competitive cost, it was an easy decision to make.”

Renewable Diesel and Future Fleet Outcomes

The city of Oakland has been using renewable diesel in all of its diesel-­powered equipment, including Fire Department apparatuses and off-road equipment, since fall of 2015. 

At a Glance

Fleets switching to renewable diesel have cited the following benefits:

  • Reduced emissions
  • Using a fuel made of renewable sources
  • Using the same infrastructure as diesel with no additional costs
  • Cost-competitive in certain areas
  • No performance issues
  • Reduced or eliminated need for regeneration in vehicles with diesel particulate filters.

“We expect to displace the consumption of about 250,000 gallons of petroleum diesel and eliminate more than 1,500 tons of greenhouse gas emissions each year, and we have yet to encounter any drawbacks,” Battersby said. “The most common reaction I’ve experienced is disbelief that there is a cleaner burning direct diesel fuel substitute that is made from renewable sources, doesn’t require any additional expense for the fuel itself, and does not require equipment and infrastructure modifications.”

The Eugene Water & Electric Board (EWEB), Oregon’s oldest public utility, has also incorporated renewable diesel for many of the same reasons — and much to the same result. To reduce greenhouse gas emissions levels and use of fossil fuel, the fleet had been relying on higher ratios of biodiesel. However, price and cold weather performance presented limitations.

When UPS and the City of San Francisco both adopted renewable diesel, it caught the fleet’s attention. With further research, the fleet decided it was time to give it a try.

“We have uncovered absolutely no performance hiccups by switching to renewable diesel — it’s almost too good to be true,” said Gary Lentsch, CAFM, fleet manager, EWEB.

Today, renewable diesel powers every diesel engine on EWEB’s roster. Because it meets the ASTM D975 industry specifications for diesel fuel, renewable diesel can be used on any vehicle that uses diesel fuel, and it’s covered under manufacturer warranties.

In addition to being easy to implement, Lentsch said diagnostic alerts from telematics devices have proven renewable diesel has reduced emissions for the fleet. “When we were using biodiesel, we would get two to three alerts a week telling us a unit’s diesel particulate filter had built up with soot, requiring a re-gen,” he said, adding that after a few weeks of being on renewable diesel, the alerts went away.

“Using a regular gallon of diesel fuel emits more than 30 lbs. of greenhouse gases into the air. Using a gallon of renewable diesel emits less than 10,” Lentsch explained.

Pat O’Keefe, CEO of Nexgen Fuel and vice president of Golden Gate Petroleum, a California-based distributor of renewable diesel, said fleets can expect similar environmental results. “Renewable diesel reduces emissions of greenhouse gases from 13-90%, and CO2 life­cycle emissions approximately 60-90%,” he said. “The cetane rating of renewable diesel is between 75 and 90 versus 48 to 52 for petroleum diesel, which means that renewable diesel burns more completely — and therefore cleaner — than petroleum diesel.”

What About Renewable Diesel Costs?

Renewable diesel is easy to implement, has clear environmental benefits, and doesn’t affect vehicle performance. But what about costs?

In California, renewable diesel is cost competitive with petroleum diesel and biodiesel thanks to the state’s Low Carbon Fuel Standard (LCSF), which offsets some of the expense. “The largest market for renewable diesel fuel is California, where a tax and regulatory system encourages low carbon liquid fuels,” Schaeffer said. “We have seen retail prices for renewable diesel in California hover around the price for traditional ultra-low-sulfur diesel (ULSD).”

A January 2024 Clean Cities Alternative Fuel Price Report found that the average renewable diesel price in California was $5.37/gallon, a 15.8% decrease from October 2023. The average diesel price in California was $5.25/gallon, a 16.8% decrease during the same period, making average renewable diesel prices $0.12/gallon higher than average diesel prices in California. Two renewable diesel prices submitted from Idaho and Wyoming were considerably lower than RD prices in California, bringing the overall average RD price in this report to $5.34/gallon.

Where is Renewable Diesel Available?

Renewable diesel may be cost competitive in some markets, but can all markets get it? Technically, all states are able to get renewable diesel, but none encourage or incentivize it the way California does. 

“Renewable diesel is primarily sold in the State of California at this time due to the fact that California has the Low Carbon Fuel Standard,” O’Keefe explained.

Neste, the oil refiner producing the renewable diesel distributed by O’Keefe’s company, said that expanding to other regions is difficult due to distribution.

“We have good logistics and distribution in California, so California for us is a very easy place where we can sell to different government fleets. In the other states, it’s a little bit more complicated, but it’s doable,” said Tuija Kalpala, marketing manager of Houston-based Neste US. The company has four plants worldwide, including in Singapore and Europe. Neste’s West Coast supply of renewable diesel comes from Singapore, and it can supply the East Coast and Gulf Coast states from Europe or Singapore, she said.

Delivery costs are higher for non-­coastal states, Kalpala said. These higher costs coupled with a lack of incentives means the fuel could be prohibitively expensive.

However, a lack of LCFS doesn’t mean fleets aren’t making the switch for the environmental benefits. Lentsch with the Eugene Water & Electric Board in Oregon knows of at least seven other government fleets in the state using the fuel, despite the fact that it costs slightly more.

Increased Interest for Renewable Diesel Along with More Fleets Going Green

The New York City fleet is also in the process of a renewable diesel move as part of its strategy to reduce greenhouse gas emissions.

In November 2023, the city announced its plans to to transition all heavy-duty vehicles in the city’s fleet from fossil to renewable fuel. The city’s fleet currently includes more than 12,600 on- and off-road trucks and specialized equipment that operate on diesel fuel. However, by the end of Fiscal Year 2024, the city plans to have them all operating on renewable diesel with most trucks already transitioned to the fuel.

“Increased use of biodiesel and development of renewable diesel options are important aspects of our strategy,” said Keith Kerman, chief fleet officer for the city’s Department of Citywide Administrative Services.

Schaeffer explained that while the current supply of renewable diesel is low, it may increase along with demand. “Interest in the fuel among fleets across the country could help encourage more availability for the product to meet growing demand,” he said.

Editor's Note: This article was originally published in March 2016 and has been updated with changes to fleet changes and verified for continued relevancy.  

About the author
Shelley Mika

Shelley Mika

Freelance Writer

Shelley Mika is a freelance writer for Bobit Business Media. She writes regularly for Government Fleet and Work Truck magazines.

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