Is Renewable Diesel Still a ‘Miracle Fuel’?

Image: Getty Images

Compared to petroleum diesel, renewable diesel is a fairly new fuel: It’s really only been marketed for truck fleets, construction, marine, rail, and other industry segments since about 2015. At the same time, it’s been around long enough that early adopters know the value it delivers. So how’s it going? Fleets and producers provide the latest updates on performance, pricing, and availability.

What Is Renewable Diesel? 

If you’re not familiar with renewable diesel, it’s made from sustainable sources such as natural animal fats, vegetable oils, greases, plant waste, and other sources. Advancements in refining technology mean that previously unused resources can now be reused, which provides significant environmental benefits, according to Neste, a producer of renewable diesel.

The specialized processes used to produce renewable diesel deliver near zero contaminants and other benefits, such as: It can be used as a drop-in replacement for ultra-low-sulfur diesel and biodiesel, reduces greenhouse gas (CO2) emissions by 80%, has 24% lower carbon monoxide levels, and it’s a high cetane fuel, which is good for greater pickup, cold start, and quieter operation, according to Neste. 

Neste’s proprietary technology allows the company to source 80% of its raw materials from waste...

Neste’s proprietary technology allows the company to source 80% of its raw materials from waste and residues.

Photo courtesy of Neste

How Is Renewable Diesel Performing for Fleets?

City of Oakland

The City of Oakland, Calif., was the first major municipality in North America to adopt the use of renewable diesel in 2015. Nearly five years in, the fleet is now using the fuel in all of its diesel-powered equipment. That adds up to approximately 375 vehicles (including emergency vehicles), plus mobile equipment, as well as the city’s inventory of more than 40 stationary emergency backup power generators. Richard Battersby, CAFM, CPFP, assistant director of Oakland Public Works, said he’s pleased with the performance; the fleet has greatly reduced its carbon footprint and transitioned to a renewable fuel, all at no additional cost.

“Although at first renewable diesel seemed too good to be true, it truly has proven to be a ‘miracle fuel,’” he said. “Making the switch to renewable diesel is absolutely the easiest alternative fuel implementation that I have ever experienced.”

Since first adopting renewable diesel, Battersby said the fleet has used about 375,000 gallons annually. 

Matt Leuck, technical manager, North America, Neste US, said that the city’s broad adoption of renewable diesel has occurred with zero hiccups. “The diesel switch has totaled more than one million gallons to date — and in four years, the city has had no performance issues, fewer diesel particulate filter issues, and no tank/storage issues.”

The City of Oakland plans to increase its use of renewable diesel by acquiring more equipment in which it can be used. 

Is Renewable Diesel Still a ‘Miracle Fuel’?

REG Charts based on California Air Resources Board Assessments Compared to Federal ULSD

Eugene Water & Electric Board

The Eugene Water & Electric Board (EWEB) in Oregon has also been using renewable diesel since 2015 and was the first fleet operation in the Pacific Northwest to go to 100% R99 renewable diesel — a switch Gary Lentsch, CAFM, fleet manager, said essentially happened overnight. The fleet’s current alternative fuel program consists of blends of E-15 and E-85 (ethanol-blended fuels) and R99 renewable diesel. Alternative fuels contributed to more than 55% of the fleet’s transportation fuels.  

“Running renewable diesel has been a great experience, as we have never experienced any ill effects from any of our vehicles running the fuel,” Lentsch said. “The total emissions reductions for the alternative fuels we use has consistently been over 25%. Being stewards of the public’s money, we would not have been able to meet our sustainability goals without using renewable diesel.”

Charlotte Water

Charlotte Water, operated by the City of Charlotte, N.C., is the largest public water and wastewater utility in the Southeast U.S. and is new to renewable diesel. Starting in May 2019, the fleet began piloting the fuel in 34 vehicles used in utility field operations. “I had been researching it since the fall of 2017 as an alternative fuel for vehicles where electricity didn’t make sense,” said Kathy Gibson, fleet manager. “Since we started using renewable diesel, no performance differences have been reported by operators or the shop.”

As the six-month pilot draws to a close, Gibson said environmental results have been positive, but come at a cost. Even so, the fleet plans to add renewable diesel or another “green” diesel to the citywide fuel contract for larger scale use. “R99 reduces emissions by 68% as compared to regular diesel, but is nearly twice the price and not widely available. Price is a challenge but will probably be addressed by the volume increase,” she said. “It feels good knowing that Charlotte Water is using an alternative fuel that is made from reused/renewable products.”

Todd Ellis, executive director, regional sales, at Renewable Energy Group (REG), which is providing renewable diesel to Charlotte Water, noted that the pilot yielded significant results right away. “Within the first three months, those vehicles had reduced greenhouse gas emissions by approximately 75 tons compared with petroleum diesel,” he said. “That 75 tons is the equivalent to the greenhouse gas emissions of an average passenger vehicle that has driven over 183,000 miles.”

Clean Fuel Legislation: LCFS Programs Low-carbon fuel standard (LCFS) programs mandate the use...

Clean Fuel Legislation: LCFS Programs Low-carbon fuel standard (LCFS) programs mandate the use of low-carbon fuels — alternative fuels that burn cleaner than fossil fuels, such as renewable diesel. The goal is to decrease carbon dioxide emissions from vehicles and reduce the carbon footprint of transportation. These standards require fleets to look for cleaner fuel solutions and can have an impact on pricing and availability in these areas.

Pricing Differences

As Gibson noted, the price of renewable diesel can be prohibitive for some fleets. But pricing can depend on the location of a fleet and, moreover, clean fuels legislation, which can affect demand and the related supply. 

For instance, Lentsch said the EWEB used R99 for a few years until the cost per gallon escalated to more than a dollar more than diesel. At that time, the fleet blended backward to R50 for about a year, until it became affordable again. But Oregon’s low-carbon fuel standards (LCFS) program eventually created a greater demand that sent more fuel to the state, lowering the price per gallon.  

Neste’s three refineries produce 2.7 million tons of renewable diesel every year, with an...

Neste’s three refineries produce 2.7 million tons of renewable diesel every year, with an expected 1.7 million additional tons by 2022.

Photo courtesy of Neste

“Demand for a low carbon intensity (CI) fuel in the California market grew because of their low carbon fuel standards, so the producers of renewable diesel simply sent their low CI fuels to California,” Lentsch explained. “Other states may have been receiving low CI fuels at a much higher cost, or receiving high CI fuels that were made from undesirable feedstocks such as palm oil. The logistics of moving the fuel also added to the price, making it simply unaffordable for fleets to use.” 

Lentsch said Oregon’s LCFS program was the turning point for affordable renewable diesel pricing. “Over the last 18 months, Oregon’s Clean Fuels program has gained traction…This has dropped the price of renewable diesel to be within pennies of what it cost us for diesel,” he said. “Oregon became the second state in the nation to follow California with its own Clean Fuels program. Since then, the producers have come back to Oregon with a low CI fuel at affordable prices. As these programs continue to mature, we are seeing renewable diesel prices continue to be much lower here than in other parts of the country.” 

For Battersby, who operates out of a state that has had an LCFS program in place since 2011 and has a high demand for renewable diesel, pricing has remained consistent. “Renewable diesel has closely mirrored the cost of petroleum diesel in California,” he said. “This has not changed over the years.”

Pricing Over the Years*

Gary Lentsch said the Eugene Water & Electric Board (EWEB) has seen...

Pricing Over the Years*
Gary Lentsch said the Eugene Water & Electric Board (EWEB) has seen the price per gallon of renewable diesel fluctuate over the years. Compared to traditional petroleum diesel, this is the average cost per gallon EWEB paid. *The prices listed are those paid by EWEB and don’t necessarily reflect the prices quoted by distributors.

Graph courtesy of REG

What Affects Availability?

Legislation can also have an impact on the availability of renewable diesel. 

“Much of the product goes to the West Coast because of LCFS there,” Ellis from REG said. “Although demand still outpaces supply, producers are taking action to increase renewable diesel production or find ways to stretch the supply, such as blending with biodiesel. Supply nationwide will be a challenge for the foreseeable future.”

Gibson said in her experience, availability hasn’t been an issue. “Renewable diesel is pricey but available,” she said. “We can order a load and receive it within a few days.”

Neste added that renewable diesel has always been in controlled, but short, supply, compared to market demand. However, supply is expected to grow. 

Jeremy Baines, president, Neste US, said production is likely to increase. “Demand from end customers for renewable diesel has been strong and is increasing,” he said. “As more and more customers become aware of this fuel, try it out and share their experience, we anticipate demand to continue to grow.”

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.

View Bio