BY: RYAN C. LANSDOWNE
VICE PRESIDENT, J.C. LANSDOWNE, INC.
There has been a lot of questions lately on a new diesel fuel that was rolled out in the last quarter of 2023, Renewable Diesel RD99. A number of factors are fueling Renewable Diesels fast growth in California including LCFS (Low Carbon Fuel Standard). Since LCFS went into effect in California in 2011 it requires petroleum refining companies selling transportation fuel in the state to be mixed with biofuels (Ethanol – Gas and Bio Diesel – Diesel) to lower the carbon intensities mandated by the State Of California. The premises set forth with the adoption of LCFS in California was to provide an increasing range of renewable alternatives to reduce petroleum dependence while also achieving air quality benefits.
The main difference in Renewable Diesel RD99 and Petroleum Diesel is the feedstock for which the products are sourced. The difference between the two and what makes RD99 a Renewable is the feedstock components that make up the finished product. RD99 is sourced from multiple renewable feedstocks including soybean oil, canola oil and animal fats. Whereas petroleum diesel uses crude oil from sources all over the world to produce petroleum diesel such as California spec CARB #2 Diesel. The feedstocks are treated to remove impurities and then they are hydrotreated with high pressure hydrogen to remove oxygen and separate the water. The next step in the refining process of RD99 is isomerization where cold flow properties are managed to ensure compatibility with existing infrastructure and engines. The final step in the refining process is fractionation where the product finishes the refining process and turns into the finished product Renewable Diesel RD99. Being RD99 is a like to like product to petroleum diesel it can use our existing energy infrastructure like pipelines, train tankers, truck tankers and fuel storage facilities to take it to the open market. RD99 can be seamlessly blended, transported and processed with petroleum diesel unlike Bio Diesel.
The largest misconception however with Renewable Diesel RD99 is that RD99 is Bio Diesel or B20 and now R20 as its known at the retail stations and truck stops. However RD99 is a completely new version of Diesel that does not come with the shortcomings of Bio Diesel (B20 or R20). Renewable Diesel RD99 is a HVO (Hydrotreated Vegetable Oil) whereas Bio Diesel is a FAME (Fatty Acid Methyl Ester). The main difference between the two are found within their chemical composition (Feedstocks). Renewable Diesel RD99 has none of the performance or maintenance concerns that Bio Diesel (B20) does as it overall performs like a petroleum diesel (CARB #2 Diesel). Unlike Bio Diesel, Renewable Diesel RD99 goes thru the traditional petroleum refining hydrotreating process which makes it physically and chemically similar to conventional petroleum diesel. This RD99 refining process is free of unwanted components such as sulfur, metals and aromatics found in petroleum diesel making it less harmful to the environment. Bio Diesel undergoes a completely different manufacturing process called transesterification which does not result in the enhanced properties of a hydrotreated fuel like Renewable Diesel RD99 or petroleum diesel. Through the transesterification manufacturing process Bio Diesel contains oxygen making it completely different from RD99 and petroleum diesel thus it can’t be a 100% substitute fuel. Bio Diesel must be blended at a maximum rate of 20% with petroleum diesel (B20) or Renewable Diesel (R20) to be put into a tank without the risk of gelling.
The nice thing about RD99 is that it is a backward compatible solution that both older and newer on road and off road equipment can use right away. It has been reported as well that older engines that are less advanced can even gain more emission cutting benefits from RD99 by cutting GHG (Green House Gas) emissions by up to 75%. However, the most important fact about RD99 is being it is a HVO (Hydrotreated Vegetable Oil) meeting ASTM D975 specifications in compliance with OEM requirements makes it a drop in fuel alternative to petroleum diesel. Not only does RD99 lower the GHG emissions and meet the most stringent OEM specifications but it has been tested to have a higher CETANE rating at 70 where as petroleum diesel has a CETANE rating of 45. Thus many in the petroleum industry actually consider Renewable Diesel RD99 a premium diesel when compared to conventional diesel.
For better or for worse the State of California will continue to be the leader in advancing the green energy agenda at both the state and federal levels. The push towards a green energy future for the oil and gas industry here in the State of California will continue to evolve but for now two major oil refineries (Phillips 66 and Marathon Petroleum) in Northern California will be completely re-tooled to only make Renewable Fuels including RD99, Renewable Gasoline and Renewable Jet Fuel. It is expected that the Phillips 66 Rodeo Refinery in Northern California will be producing 50,000 barrels (2,100,000 gallons) by the second quarter of 2024. As well Chevrons El Segundo Refinery in Southern California is on track to begin production of Renewable Diesel RD99 in late 2024. Not to mention that in 2021 Chevron announced intentions to grow RD99 production capacity to 100,000 barrels (4,200,000 gallons) per day by 2030. As well locally the old Flying J Refinery on Rosedale Highway in Bakersfield, CA is in the process of being retrofitted by their new owners Global Clean Energy Holdings to be able to process and refine 15,000 barrels (630,000 gallons) per day of Renewable Diesel. It has also been reported by Department of Energy (DOE) that RD99 reached 2.6 billion gallons in 2023 and is expected to grow to 5.9 billion gallons by the end of 2025. Thus, the future is here with Renewable Diesel, the big question is you want to make sure you’re getting Renewable Diesel 99 (RD99) and not a Bio Diesel derivative from a reputable source. It’s important to have a good relationship with your fuel supplier and not to be afraid to ask the hard questions, because it may cost you a lot more in the long run if your sold something that is outside of spec just because you are making a decision solely based on price.
