USDA’s Foreign Agriculture Service (FAS) reports that tremendous growth in demand for renewable diesel over the past few years is resulting in significant impacts to global feedstock trade.
Renewable diesel, like biodiesel, is produced from the same renewable feedstocks such as vegetable oils, animal fats, or used cooking oil (UCO). The difference is that renewable diesel is produced using a hydrogen treatment which makes it chemically equivalent to petroleum diesel and can therefore be blended at higher levels and transported using existing pipelines.
As a result, the United States is rapidly expanding imports of animal fats and vegetable oils to both use as feedstocks for renewable diesel production and to backfill other feedstocks, like soybean oil, that have been diverted to renewable diesel production.
The report says the drastic expansion of renewable diesel production has been policy driven and while it is expected to continue to grow and alter feedstock markets the rate of growth “will be highly dependent on federal and state policies, availability of feedstocks, and sustained U.S soybean meal export gains.”