The renewable diesel market is only 100 billion, with a huge gap between supply and demand

Renewable diesel is processed through hydrotreatment-isomerization-fractionation, which can reduce greenhouse gas emissions by 80%. It is a low-carbon fuel that has the same molecular structure and chemical composition as fossil diesel, but its is made from animal fats, food waste and vegetable oils. Renewable diesel is a clean fuel that complies with the ASTM International Diesel Fuel Oil Standard (D975) and can be used directly in engines originally designed to run on conventional diesel fuel without the need to mix with petroleum diesel.

Industrial Research Center released “China’s 2023-2028 The Renewable Diesel Industry Market In-depth Research and Development Prospects Forecast Report shows that in recent years, environmental problems have become increasingly serious, and countries around the world are paying more and more attention to the research and development and application of clean energy technologies. At the same time, renewable diesel Technology continues to improve, and global demand for renewable diesel is growing rapidly. The global renewable diesel market will reach nearly 100 billion yuan in 2022, with the emergence of American Renewable Energy Group, PBF Energy, Valero Energy, Gevo, Phillips 66 and Finland’s Neste OYJ It is expected that the global renewable diesel market will exceed 150 billion yuan in 2028, and the market space is huge.

(1) Policies to promote the development of renewable diesel

In recent years, countries around the world have attached great importance to the use of clean energy. Many countries have formulated tax incentives for clean energy such as renewable diesel to support the development of the clean energy industry. For example, the U.S. Senate approved the Inflation Reduction Act of 2022 in August 2022, which would extend the $1 per gallon blend tax credit for biodiesel and renewable diesel through the end of 2024.

(2) The gap between supply and demand is huge

The development time of renewable diesel technology is relatively short. Due to the influence of many factors such as raw materials, production processes and consumer awareness, the global renewable diesel production enterprises are still relatively limited, and the production capacity is far lower than that of traditional diesel. Even in many countries The commercial use of renewable diesel has not yet begun. There is still a huge supply and demand gap between the supply capacity of renewable diesel and the demand for completely replacing traditional diesel. The huge gap between supply and demand also provides renewable diesel companies with great development space and development. opportunity.

(3) The United States is the world’s largest producer and consumer of renewable diesel

The United States has a relatively developed industry and is the first country in the world to promote the industrial application of renewable diesel. At the same time, the United States will promote the use of renewable energy such as renewable diesel in the future, provide continuous subsidies for renewable energy such as renewable diesel in the long term, and at the same time provide certain benefits to enterprises. Due to tax incentives, the United States has many renewable diesel production companies and ranks first in the world in renewable diesel production capacity. At the same time, since there is no difference in usage between renewable diesel and ordinary diesel, more and more consumers choose to use more environmentally friendly renewable diesel, and the United States has become the world’s largest consumer of renewable diesel.