U.S. biofuels consumption has risen in 2022 and that growth is expected to continue, according to the U.S. Energy Information Administration’s latest Short-Term Energy Outlook, released July 13. Renewable diesel is expected to account for much of the increase.

According to the EIA, increasing demand for transportation fuels, higher 2022 Renewable Fuel Standard blending obligations, and new renewable diesel production capacity coming online all contribute to the expected increase in biofuels consumption.

The EIA noted that prices for renewable identification numbers (RINs) have increased in 2022, reaching near record-high prices, which has facilitated growing biofuel consumption. When compared to the first half of 2021, ethanol consumption for the first half of 2022 was up 32,000 barrels per day, or 3 percent. During the same period, renewable diesel consumption grew by 32,000 barrels per day, or 46 percent, while the consumption of other biofuels increased by 6,000 barrels per day, or 133 percent. Biodiesel consumption was unchanged, according to the EIA.

The EIA currently predicts that renewable diesel consumption will average 116,000 barrels per day in 2022, up 41,000 barrels per day or 53 percent when compared to last year. Renewable diesel consumption is expected to average 164,000 barrels per day in 2023. The EIA cautioned that that forecast assumes that some of the capacity scheduled to come online in 2022 and 2023 will have delays or be affected by high agricultural feedstock costs.

Because 1 gallon of renewable diesel produces more RIN credits under the RFS than biodiesel and faces no infrastructure or blending constraints, the EIA said it expects new renewable diesel plants to be brought online to secure scarce oil feedstocks, such as soybean oil, outpacing biodiesel refineries and limiting biodiesel production. The agency forecasts biodiesel consumption to increase slightly from 2021 levels this year, but to decrease in 2023 as renewable diesel increasingly satisfies RFS requirements. Biodiesel production for 2022 is expected to fall 8 percent when compared to last year, averaging less than 100,000 barrels per day, the lowest annual average since 2015.