The steady renewable diesel boom continues

0














Steady Renewable Diesel Boom Continues | International Biofuels Magazine



This website requires javascript to be enabled.

Tom Fox, Head of Renewable Fuels, OTX, explains how, as the world emerges from the Covid pandemic, the renewable diesel (RD) market will continue its steady boom this year.
He said: “Despite the challenges, RD and its sustainable treatment product, Sustainable Aviation Fuel (SAF) have proven to be superior biofuels – no alternative in space to low carbon liquid fuels can compete with its mature technology, high quality diesel specifications, proven distribution of supply, ability to attract finance, enduring strength to decarbonize fuel demand that cannot yet electrify…Even if it has not no real competition, RD is not immune to risks and 2022 will test the limits of its success.
The rules
“The regulatory landscape for low-carbon policy in 2022 is only going to get stronger. From the outcomes of COP26 to the increasingly widespread attention on climate change, the policy outlook for most countries has firmly Because DR works and is available now, it will remain a clear path to low-carbon energy delivery in transport.
In terms of policy, keep an eye on EU Member States’ implementation of RED II measures, designed to achieve a 14% mix of different categories of biofuels or low-carbon alternatives in the transport fuel pool by 2030.
“Details that may tip the DR market include caps on crop feedstocks, sub-targets in hard-to-process cellulosic feedstocks, Schedule 9A and 9B distinctions, and the phasing out of Palm oil.
US federal policy on renewable fuels remains stable, but the real driver of the R&D is California’s low-carbon fuel standard; Because it mandates greenhouse gas (GHG) reductions across the fuel pool, high RD blends have a disproportionate impact on meeting this standard.
“It is also the benchmark for other states and Canada in developing similar programs – 2022 will see more of the United States and Canada fall under regimes that rely on DR to achieve the goals of reduction.
“Finally, the entire market for R&D and raw materials is global. Local policy changes can alter trade flows, for example with China adjusting its used cooking oil export position to a base of manufacturing of fatty acid methyl esters (FAME) and R&D in the country.
“It’s safe to say that the outlook for 2022 for RD and SAF feedstocks is the same as in 2021, and likely the rest of the 2020s. Tight supply of vegetable and waste oils will continue to drive prices high R&D and the quest to lower those prices with a next generation of raw materials. Anything that avoids high-demand agricultural space is something to focus on. In general, this can go in two directions. First, efforts to efficiency in existing markets for new niche volumes in used oils and by-products such as POME.
“Second, there is the more difficult path – a technological effort to find efficient, feasible and scalable conversion technologies that unlock the true price of raw materials: cellulosic raw materials with enormous supply potential, such as waste municipal solids (MSW) and wood waste.
Given the limits of the niche, this is likely where a long-term sustainable solution for commodities lies, given the localized and material availability of these flows. The tailwind is not just the economics of expensive oils, but regulatory pressure and premiums for cellulosic and advanced grades in the EU and US. It is ultimately a question of adequate technological capacity.”

Share.

Comments are closed.