The impact of federal and state environmental regulations is creating an unprecedented demand for renewable diesel as a mandated and tax credited fuel as a more sustainable replacement for biodiesel and other petroleum based fuels. The need for lower carbon intensity feedstock, in this case soybean oil, has encouraged U.S. soybean processors to dramatically increase the production capacity of soybean processing plants through expansions of existing plants and construction of new facilities throughout the corn belt. Additionally, the new initiatives have forced a marriage of petroleum refiners and soybean processors to provide the new fuels. Renewable Diesel is a one-for-one, drop-in replacement for current diesel fuel and has the same physical characteristics as petroleum diesel, requiring no adjustments to engines, using 100% renewable fats and oils.
The drive for more sustainable, lower cabon intensity fuels for both diesel trucks and airplanes (via sustainable aviation fuel), is creating an additional 20% to 30% increase in U.S. soybean processing with a corresponding increase in soybean meal. Renewable diesel will effectively be subsidizing the production of soybean meal, and lowering the cost while increasng the availability of feed and food protein.
