EIA reports that US biofuel production capacity increased last year due to the renewable diesel rush.

Data from the U.S. Energy Information Administration showed that five new renewable diesel plants were opened in 2018. This increased U.S. production of this drop-in substitute for diesel and other emerging biofuels to 282,000 barrels per day (bpd).

According to EIA, two renewable diesel plants were opened in the U.S. Gulf Coast region and on the West Coast. One facility was opened on the East Coast. The total number of renewable diesel plants across the United States now stands at 22. West Coast capacity at the beginning of this year was more than twice as high as last year, at 82,000 BPD.

In recent years, U.S. Fuel Makers have added renewable diesel to their portfolios to try and survive the transition from petroleum-based fuels. Renewable diesel is expensive to produce, and its imports and production have been heavily subsidised by the federal and state governments.

This rush to the market has driven some biodiesel manufacturers out of business, since older-generation biofuels can only be blended into renewable diesel and receive lower financial incentives.

The EIA reported that three biofuel plants have closed in the last year. One each was located on the East Coast, West Coast, and Midwest. Analysts predict that more biodiesel factories will close if the government doesn't provide more support.

According to EIA, the biodiesel production capacity remained largely unchanged, at 136,000 barrels a day.

One plant closed on the East Coast while a newer, larger facility was opened on the Gulf Coast. This increased the output capacity of the 187 plants that were in operation at the beginning of the year by 2%, to 1,18 million bpd. (Reporting and editing by Deepa Babyington in Denver)

(source: Reuters)