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August 11, 2020   |   Diesel Technology Forum

Policy Insider

Fuels that Work: Ultra-Low Sulfur Diesel and Biodiesel Power the U.S. Economy

Unlike gasoline, diesel fuel and the vehicles and equipment it powers is the platform of work. About one out of every two sectors of the economy rely on diesel. Diesel engines, old and new, are capable of operating on high quality advanced biofuels including biodiesel and renewable diesel fuel delivering sustainability at low cost.


Unlike gasoline, diesel fuel and the vehicles and equipment it powers is the platform of work. About one out of every two sectors of the economy rely on diesel. Diesel engines, old and new, are capable of operating on high quality advanced biofuels including biodiesel and renewable diesel fuel delivering sustainability at a low cost.

Diesel fuel and engines are often described as the platform of work. Diesel fuel is the most energy dense transportation fuel available, and the diesel engine is the most efficient means to transfer this energy density into useful work, while gasoline is almost exclusively used in the fleet of passenger vehicles. Commercial vehicles – heavy-duty trucks, buses, as well as emergency service vehicles, locomotives, marine vessels, ferries, agricultural and construction equipment and large stationary industrial engines, all rely primarily on diesel power. 

Energy Density Graph

One out of every two sectors of the economy rely on diesel technology. America’s retailers depend on diesel to deliver goods to store shelves, manufacturers depend on diesel to deliver raw inputs and finished goods, farmers depend on diesel for the planting season and to deliver the harvest, while the construction industry depends on diesel to do the hard work.

 Consumption of Diesel Fuel by End Use (2018)

Powering these large sectors of the economy requires large amounts of energy. Originally designed to operate on peanut oil, the diesel engine patented by Rudolf Diesel over a century ago today has evolved dramatically in many ways. Today, ultra-low sulfur diesel fuel powers most diesel engines around the world,  but diesel engines remain capable of using high quality blends of biodiesel and renewable diesel fuel in both new and existing engines of all ages and types. 

Let’s take a more in-depth look at the fuels for diesel engines.

Petroleum Diesel Fuel

The major feedstock for the standard diesel fuel today - ultra-low sulfur diesel fuel (ULSD) - is crude oil. While new found sources of domestic crude oil have expanded recently, crude oil is also a global commodity. According to the most recent data published by the U.S. Energy Information Administration, the oil and gas industry produced 310 million barrels of crude oil as of May 2020 and imported 188 million barrels. Beginning in 2006, U.S. Environmental Protection Agency required the use of ULSD in the fleet of on-road vehicles with a full transition to ULSD only for all uses on- and off-road in 2010. U.S. refiners produced over 107 million barrels and exported 6.5 million barrels of ULSD in 2019, according to the U.S. Energy Information Administration.

As crude oil is the major feedstock to petroleum diesel fuel, changes in the price of crude oil also drive the price of diesel fuel as well as gasoline. Other variables beyond the cost of refining also contribute to the price of fuel including distribution, marketing as well as state, federal and sometimes local taxes.

Diesel Fuel Prices

Advanced Renewable Fuels: Biodiesel and Renewable Diesel Fuel
Diesel engines, old and new, are capable of operating on blends of high quality biodiesel. Most heavy-duty diesel engines are capable of operating on blends of biodiesel up to 20 percent, or B20. Some new or newer diesel engines are approved to operate on higher blend levels. Renewable diesel fuel is produced to meet the same engineering standard as petroleum diesel fuel and can be used as a 100 percent replacement fuel to petroleum.

Both biodiesel and renewable diesel fuel are derived from waste agricultural feedstocks, Oil derived from soybeans and waste animal fats make up the largest feedstock for these fuels. As long as we produce soy for animal feed and other uses, producers of biodiesel and renewable diesel fuel will have access to feedstocks.

Relative to petroleum diesel fuel, the consumption of these advanced biofuels is relatively small but growing. As of May 2020, 147 million gallons of biodiesel was consumed. This compares to 4.5 billion gallons of ULSD petroleum diesel fuel consumed during the same period. While the price of biodiesel varies across the country, the Department of Energy in its most recent alternative fuel report, estimates the biodiesel (B20) is sold at about a $0.30/gallon discount to petroleum diesel fuel.

The consumption of renewable diesel is much smaller and focused in a few states and regions that incentivize low carbon transportation fuels. The Department of Energy in its alternative fuel report estimates that renewable diesel fuel is sold at a $0.20/gallon discount to petroleum diesel fuel.

Advanced Biofuels Deliver Big Benefits at Low Cost
Both biodiesel and renewable diesel fuel are considered advanced biofuels by the U.S. Environmental Protection Agency defined as reducing greenhouse gas reductions at least 50 percent. Renewable diesel fuel is capable of reducing greenhouse gas emissions upwards of 80 percent. The use of these fuels are generating large greenhouse gas reduction benefits with least cost compared to other alternatives.

In California, that requires the gradual reduction in the carbon content of transportation fuels sold in the state through the Low Carbon Fuel Standard, biodiesel and renewable diesel fuel are generating the greatest reduction in greenhouse gas emissions in the transportation sector. These benefits exceed those from the electrification of cars, trucks and buses by almost 4:1.

 CO2 Reduction

A key advantage to the use of renewable biodiesel fuels is that compared to competing alternatives, they do not require the purchase of new vehicles, equipment or engines nor do they require expensive additional investments in refueling or recharging infrastructure. Their benefits can be felt immediately across entire fleets of vehicles, rather than only in newly acquired vehicles dependent on new infrastructure.  Biodiesel fuels can be stored, used, pumped and handled virtually the same way as petroleum diesel products.

Driving a global economy requires a steady supply of available, affordable and diverse energy sources. As the prime mover of the global economy, diesel technology continues to evolve to use the fuels more efficiently and with fewer emissions. Diesel’s sustainability is enhanced through the engine’s increasing efficiency - lower greenhouse gas emissions - and its ability to utilize low-carbon advanced biofuels like blends of high quality biodiesel and renewable diesel fuel. That’s why the new generation of diesel engines, fuels and equipment will continue to play a dominant role powering essential services and key sectors of the economy. 



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Key Contact

Ezra Finkin
Director, Policy
efinkin@dieselforum.org
301-668-7230

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