ETF Releases White Paper Highlighting Significant Opportunities for Bio-Based Diesel Fuel Use in Back-up Power Generation and Microgrids
WASHINGTON (October 16, 2023) — The Engine Technology Forum announces the release of the white paper Benefits of Renewable Bio-Based Diesel Fuels developed by Transport Energy Strategies, a leading consultancy on global transport energy issues. Renewable biobased fuels, such as biodiesel and renewable diesel, are a proven and available strategy for immediately reducing greenhouse gas and other emissions. This is true in both new, and existing, diesel engines across all applications. The paper provides a foundation of information about biobased diesel fuels, their production, consumption, future growth, and volume potential. It also includes approved uses, benefits and acceptance by diesel engine and equipment makers. The paper also discusses key policy considerations for maximizing the benefits from these fuels.
“As we look for opportunities to reduce greenhouse gas and other emissions, the use of low carbon fuels like renewable diesel and biodiesel, offers tremendous benefits for near term carbon reduction. These low carbon fuels can be used immediately in any one of the millions of diesel engines, tractors, machines, and back up electric power generators working in every sector of our global economy,” says Allen Schaeffer, Executive Director of the Engine Technology Forum.
Renewable diesel (RD) fuel can be used as a “drop-in” biofuel that can be easily transported and sold at retail stations, with or without blending with petroleum diesel. RD supply has grown rapidly since 2019, largely responding to demand created by state low carbon fuel program requirements, doubling from 800 million gallons to 2.6 billion gallons (BG) as of March 2023. The United States’ RD production capacity could reach 5.9 billion gal/y, by the end of 2025.
RD is approved by manufacturers for use in a wide variety of diesel-powered engines, machines, equipment, and vehicles. Interest in using RD and RD-biodiesel blends, such as B20-R80 and B50-R50 blends, is in part based on their performance and proven ability to reduce air pollutants. They include nitrogen oxides, particulate matter, and greenhouse gas emissions.
A focal point of the paper is backup generator applications including data centers, hospitals, military, and other generator customers where the interest and use of biobased diesel fuels is growing significantly. These users see RD as a means to preserve, and continue to utilize, existing generator assets while addressing new demands to decarbonize and meet other corporate goals. All heavy-duty diesel electric power generator manufacturers welcome, and approve of the use of, RD in their products.
Ensuring the supply of continuous electric power is an increasingly important consideration for utilities, governments, and businesses alike. Diesel generators dominate the backup power market due to their unique combination of power-density and full electrical load handling, rapid response time, reliability and self-contained fueling supply. The expanded use of RD in back-up diesel power systems, or microgrid applications, can be an increasing part of a sustainable power solution that achieves real-world greenhouse gas emission reductions in line with state and federal decarbonization goals as power generation plants and transmission projects are added.
“The challenges and uncertainties facing our electric power system today are unprecedented. From needed transmission line upgrades, to increasing frequency of natural disaster and weather-related events, to a greater overall reliance on electricity. Coupled with the transition to more intermittent renewable fuels like wind and solar, ensuring continuous electrical power to communities and businesses is of greater importance than ever before,” says Schaeffer.
Diesel generators have already proven to be reliable and life-saving assets, as was recently demonstrated in California during the planned safety power shutoffs (PSPS) for wildfire season. Whether in a stand-alone setting or incorporated as part of a microgrid, back-up diesel generators utilizing renewable diesel, biodiesel fuels and blends are proven to keep the electric power on while reducing greenhouse gas and other emissions.
This paper discusses the significant opportunity for a closer alignment of climate and air quality goals in California by fostering the use of RD and biodiesel-RD blends in this sector. Policy considerations discussed include
- Allowing investor owned, and municipal utilities, to include the use of RD and biodiesel-RD blends toward meeting state Renewable Portfolio Standard (RPS) and allow them to generate Renewable Energy credits (RECs)
- Expanding the Low Carbon Fuel Standard (LCFS) to allow RD and RD-biodiesel blends to generate credits for non-transportation uses, similar to the RFS2, which allows heating oil as a non-transportation use to generate RINs under the program
- Reducing or eliminating the state diesel excise tax as it applies to RD and biodiesel-RD blends
- Creating a state tax incentive based on GHG reduction that is structured similar to the Clean Fuel Production tax credit under the recently enacted Inflation Reduction Act (IRA)
To view the white paper visit https://enginetechforum.egnyte.com/dl/QADLBsYufi/ETF_Renewable_Diesel_HVO_White_Paper_by_Transport_Energy_Strategies_October_2023.pdf_
A virtual event is being planned to discuss the paper and related issues. For an invitation, please email [email protected].
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