EIA explains biodiesel, renewable diesel, and feedstock competition

Renewable diesel is chemically indistinguishable from petroleum diesel, while biodiesel is a fatty acid methyl ester made through transesterification. The U.S. Energy Information Administration separates the fuels from sustainable aviation fuel and other biofuels and ties each pathway to the feedstocks and blending rules that shape the market.

What the fuels actually are

Biodiesel is generally blended into conventional diesel at limited ratios, in part because of cold-flow and engine-use characteristics. Renewable diesel can serve as a drop-in replacement in many applications.

The agency’s broader biofuels category is wider still. EIA groups sustainable aviation fuel and fuels made from nontraditional feedstocks or processes under “other biofuels,” which is where many of the newest low-carbon liquid fuels sit. Casual market shorthand often lumps these products together even though they do not behave the same in tanks, engines or terminals.

Why blending rules still matter

EIA’s use-and-supply material shows renewable diesel is the second-most consumed biofuel after fuel ethanol. Renewable diesel can be blended with petroleum diesel or biodiesel in various amounts, including blends such as B20R80 and B20R20. Fleets and fuel distributors treat it differently from biodiesel, which remains tied to more limited blend use.

The market still uses blend labels as a shorthand for compatibility and end use, but the chemistry behind those labels is not the same. Biodiesel’s FAME structure gives it different handling and cold-weather behavior than renewable diesel, even when both travel through the same diesel infrastructure. Renewable diesel’s drop-in character makes it easier to slot into existing fuel pools without changing engines or storage systems.

Feedstocks are the real battleground

Fuel type and feedstock choice are tightly linked. The biofuels sector now leans heavily on soybean oil, canola oil, used cooking oil, tallow and distillers corn oil, and those lipid inputs are no longer reserved for one market segment. They are increasingly contested by road diesel, aviation and marine fuel markets that all want the same molecules.

That competition affects project economics from the first commercial model onward. Renewable diesel and sustainable aviation fuel facilities are capital-intensive, and profitability depends not only on the conversion unit but on feedstock availability, processing costs and policy incentives. If a plant can secure low-cost used cooking oil or tallow, it can look very different on paper from a facility buying virgin soybean oil or canola oil into the same renewable diesel barrel.

Policy still sets the pace

The Renewable Fuel Standard, created by the Energy Policy Act of 2005, amended the Clean Air Act and remains the central federal framework for biomass-based diesel demand. EPA’s rulemaking for 2023, 2024 and 2025 shows that the program is still active and still contested, especially around biomass-based diesel volumes. Clean Fuels Alliance America petitioned EPA on June 24, 2024, to adjust biomass-based diesel volumes for 2024 and 2025.

Renewable diesel and biodiesel do not compete in a vacuum. They compete inside a market where annual volumes, compliance values and blending obligations can change the economics of the same feedstock from one year to the next. For project developers and traders, the regulatory calendar can move the spread between virgin oils and waste oils as much as any spot market quote.

How EIA’s data changed the picture

EIA began publishing expanded biofuels data in October 2021, adding production, imports, feedstocks and consumption for biofuels other than ethanol. That gave the market a more complete view of a segment that had previously been harder to track in public datasets. In February 2023, EIA reported that renewable diesel production surpassed biodiesel production in November 2022 for the first time since the agency began reporting renewable diesel production data.