Renewable Diesel Production and Expanded Soybean Crush
As of January 2024, the U.S. has 56 active biodiesel plants with a combined annual capacity of 2.09 billion gallons per year. This biodiesel is typically blended with petroleum-based diesel at a 5% to 20% inclusion rate. If blended at the 5% rate, this would make 40 billion gallons of B-5 blended diesel fuel.
The U.S. also has 22 renewable diesel plants with a combined capacity of 4.33 billion gallons. Renewable diesel is a “drop-in” fuel which does not need to be blended and typically is used as a direct replacement for petroleum-based diesel fuel.
Figure 1 shows the location of the biodiesel and renewable diesel plants in the continental U.S. as well as the production capacity at each plant. The smallest biodiesel plant is less than 0.5 million gallons per year in capacity and the largest biodiesel plant is 144 mgy. The average size of biodiesel plants is 37.4 mgy.
Renewable diesel plants which use a “distillation stack” process of refining the diesel fuel tend to be much larger than the biodiesel plants which use an esterification process of making biodiesel. The smallest renewable diesel plant is 5 mgy and the largest plant is 982 mgy with an average size of 196.8 mgy.
Figure 1. Biodiesel & Renewable Diesel Plants (Million Gallons/Year)
As shown in Figure 2, biodiesel production increased significantly from 2003 through 2018 reaching 1.857 billion gallons in 2018. Since then, biodiesel production has been drifting lower with just 1.698 billion gallons produced in 2023.
Meanwhile, renewable diesel production increased from minimal production in 2010 to 2.3 billion gallons in 2023. In 2023, animal fats comprised 40% of the fats and oils used for combined biodiesel and renewable diesel production whereas vegetable oils make up 60% of the feedstocks. Soybean oil comprised 64% of the vegetable oils used in combined biodiesel and renewable diesel production in 2023 with 13.04 billion pounds used. This represents 49.3% of the soybean oil produced in U.S. soybean crush plants. Of the 13.04 billion pounds used for biofuel production, 56.2% was used for production of biodiesel and 43.8% for production of renewable diesel.
Figure 2. U.S. Production of Biofuels and Share of Soybean Oil Used for Biofuels
Renewable diesel production is expected to continue to increase over the next few years, as shown in Figure 3. If all the new plants that have been announced come to fruition, renewable diesel production could more than double by the end of 2025.
If it does, then monthly use of soybean oil for renewable diesel could increase from an average of 476 million lbs per month in 2023 to more than 950 million lbs per month in 2025, as show in Figure 4. If soybean oil used for biodiesel and for food and feed use were to remain stable, then the additional soybean oil used for renewable diesel would support domestic soybean crush of 2.795 billion bushels of soybeans. That would be a 15% increase from the expected soybean crush in 2024/25.
Figure 3. Annual Existing and Expected U.S. Renewable Diesel Production Capacity
Figure 4. Soybean Oil Used for Renewable Diesel Production
This growing demand for soybean oil for biofuels is supporting an expansion of soybean crush facilities in the U.S. In 2023, the U.S. soybean crush industry processed 2.29 billion bushels of soybeans utilizing 90% of nameplate crush capacity in the U.S.Crush capacity is expected to increase to 2.7 billion bushels by the end of 2024 and to 3.23 billion bushels by the end of 2027. If annual utilization rates remain near 90% (downtime for repairs and maintenance) then crush in 2024 could approach 2.42 billion bushels, 2.7 billion bushels by the end of 2025, 2.81 billion bushels by the end of 2026, and 2.89 billion bushels by the end of 2027. Figure 5 shows where and when the new/expanded crush capacity is expected to be developed. Construction has already started on plants due to come online in 2024 and 2025. Planning is advancing for the plants due to come online in 2026 and 2027.
Figure 5. Soybean Crush Plants, Existing and New/Expanded Capacity