on Wednesday announced they are partnering on a $350 million soybean processing facility in Spiritwood, North Dakota 'to supply the rapidly growing demand for renewable diesel fuel.' Their project, which is expected to be completed in 2023, 'is expected to produce approximately 600 million pounds of refined soybean oil annually, enough feedstock for approximately 75 million gallons of renewable diesel per year.'ĭan Basse, president of AgResource, told agricultural bankers in November he had never had oil refiners reaching out to him about soybean supplies until this year. Renewable diesel can replace petroleum diesel, while biodiesel is approved to blend with petroleum diesel fuel, according to the Department of Energy.ĪDM and Marathon Petroleum Corp. Without diving into a technical paper, renewable diesel is a hydrocarbon while biodiesel is a mono-alkyl ester, produced in different processes. That stacks on top of biodiesel production, which is a separate product and different fuel. Soybean Export Council projected total new capacity looking ahead at 5.97 billion gallons. EPA already forecasts 2022 production at 1.59 billion gallons. The list of proposed and under-construction renewable diesel facilities around the country would spike production from 770 million gallons in 2021 to at least 3 billion gallons in 2023. 'But in the sense of putting this together, no one thought, 'Oh, do we have enough feedstocks to do this?' And the bottom line is we don't.' 'And they are able to get their green box checked and get investors off their backs if you have activist investors and be able to make some money in some new industry,' Nicholson said. They are also increasingly partnering with agricultural companies to make that happen. Oil refiners are helping drive the move to renewable diesel by modifying their refineries or building new ones. While each facility gets a different carbon score, an LCFS credit generally translates into 83 cents to 86 cents a gallon for renewable diesel or biodiesel. That's ramped up production to the point renewable diesel is now the single-largest fuel segment for generating LCFS credits at $153 per carbon ton, down in value about $32 a ton since early July. 'They (California) put together their law to meet their annual goals of reducing carbon emissions, which is an admirable goal, and we'll make that comment up front,' said Steve Nicholson, senior grains and oilseed analyst at Rabobank. Under California's law, there are a lot of products and pathways to reduce emissions, but renewable diesel has taken hold. Then there is the $1-per-gallon Biodiesel and Renewable Diesel Tax Credit that is set through 2022 but could be extended through 2026 in the Build Back Better Act.Ĭalifornia's low-carbon fuel standard (LCFS) is the biggest factor right now as California and a few other states move to decarbonize liquid fuels. The Renewable Fuel Standard generates renewable identification numbers, or RINs, for renewable diesel. Renewable diesel right now has multiple government policies driving new production. USDA's Economic Research Service this week projected soybean oil will see greater demand starting in 2022, while Rabobank offered a similar outlook projecting greater crush capacity starting in 2023 as more renewable diesel facilities come online.

To hit the numbers, soybean production would have to grow by roughly 3.6 billion bushels by 2030. If everything is built out as projected, farmers would have to add tens of millions of acres of soybeans and yield increases to keep up with the crush demand. For now, forecasts call for higher soybean prices, expanded acreage, and not enough soybean oil to go around. OMAHA (DTN) - Analysts are having a hard time modeling out the soybean oil needs in the near term and long term as more renewable diesel projects are announced. (Image from Rabobank: The Rush to Crush, September 2021) The blue charts show renewable diesel capacity while the orange line shows the vegetable oil needs it will take to meet that demand. A look at renewable diesel production, including the forecast through 2030 by Rabobank.

Renewable diesel production process