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:
- 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.
- Thanks to hydrogenation, renewable diesel also burns cleaner than biodiesel.
- 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.
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, manager of equipment services for the city. “When the product became available through a local supplier at a very competitive cost, it was an easy decision to make.”
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. To date, the fleet has witnessed no discernable difference from petroleum diesel, nor has it received driver complaints.
“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. “After a few weeks of being on renewable diesel, the alerts went away.”
Between renewable diesel and ethanol-blended fuels, EWEB estimates this year the utility will be able to reduce its CO2 footprint by more than 30% and reduce fossil fuel use by more than 65% compared to 2009 levels. “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).”
In Oregon, Lentsch said EWEB has been tracking pricing for alternative fuel over the last five years. Currently, renewable diesel is competitive with biodiesel. “We’re seeing R99 [renewable diesel] at around 15 cents a gallon above petroleum-based diesel fuel — comparable to the cost of B-20,” he said. “Renewable diesel is still an emerging market. As we see more competition between our fuel supplies, I’m anticipating the cost to level out.”
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.
The New York City fleet is also considering renewable diesel as part of its strategy to reduce greenhouse gas emissions.
“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. “We are excited about the recent growth in use of renewable diesel in California public fleets, and we are beginning our own discussions with renewable diesel suppliers.”
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.
Kalpala reported that Propel retail fuel stations in California selling Neste’s renewable diesel, under the name Diesel HPR, are seeing a huge success.
Battersby is confident the demand will be there. “Many government fleets are making the switch, the State of California has mandated its use for state-owned diesel vehicles, and UPS has committed to purchase 46 million gallons of renewable diesel over the next three years. I’m pretty sure it’s here to stay.”