Renewable Diesel Market Value Proposition
" RENEWABLE FUEL REGULATIONS AND INCENTIVES
Incentive
Issuer
Illustrative
Value (1)
Renewable
Fuels Standard
Federal
Government
$2.34
Low Carbon
Fuel Standards
California,
Oregon,
Washington,
Canada
$1.30
Description
.
From 2007; Federal law stipulates amount of renewable fuel that must be blended into
transportation fuel annually
•
Petroleum refiners are required to either: (1) blend biofuels or (2) buy credits (RINs) to
cover deficits
1.7 D4 RINs are generated per gallon of RD produced (vs 1.5 D4 RINS per gallon of BD)
2011 (Calif), 2013 (British Columbia), 2016 (Oregon), 2023 (Washington and rest of
Canada legislation is passed and being implemented)
Laws each slightly different and require year over year reduction in Carbon Intensity ("CI")
of fuel's lifecycle GHG emissions (equates to volume mandate that varies by feedstock)
Blender's Tax
Credit
Federal
Government
$1.00
From 2005; annual Federal budget provides BTC (note: retroactive about half the time)
Fixed $1.00 per gallon credit to blenders of Renewable Diesel & biodiesel
Proposals are floated for $2.00 per gallon credit to blenders of Sustainable Aviation Fuel
Regulatory credits allow RD to have a superior margin (on a per barrel basis) when compared to conventional diesel or BD
(1) Recent actual credit per gallon of renewable diesel produced
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