U.S. fuel makers recently rushed to redo their production plants and make them capable of producing renewable diesel. Reuters says that rush has created an excess supply of the low-emissions biofuel that’s shrinking refiner profit margins and threatening to slow or halt the development of what’s still a young industry.
Turmoil in the renewable diesel and biodiesel sector could become a significant roadblock to future investments in biofuels. The U.S. Energy Information Administration says that could potentially stall the transition away from fossil fuels. There’s so much supply available that some producers have shut down plants this year, and industry stakeholders say more are likely to go out of business before the end of 2024. U.S. renewable diesel production capacity nearly quadrupled following COVID-19 from 79 million gallons a year in 2021 to three billion gallons by 2023 as refiners were seeking ways to survive the transition away from petroleum-based products.
