November 2021

Trends and Resources

Business Trends: Battle of the biofuels: Renewable diesel vs. biodiesel

As new low-carbon diesel fuels and blends become more readily available, it is important to understand the differences between them and how each impacts engine performance.

O'Brien, P., Opportune LLP

Fuel standards programs, such as the U.S. Renewable Fuels Standard (RFS-2) and California’s Low-Carbon Fuels Standard (LCFS), have incentivized fuel producers to innovate and create new renewable fuels like biodiesel and renewable diesel. As new low-carbon diesel fuels and blends become more readily available, it is important to understand the differences between them and how each impacts engine performance.

Diesel engine basics

Before jumping into the different fuel options available, the following provides the basics of a diesel engine and how it differs from gasoline engines. In the U.S., diesel engines are commonly used by trains, boats, barges, heavy-duty trucks, public buses, and farming, construction and military equipment.

Diesel engines are compression ignition, meaning they use compression to create enough heat and pressure that the injected fuel spontaneously combusts. In most modern diesel engines, this is accomplished by using a turbocharger to compress the air going into the cylinder, directly injecting fuel just before the piston reaches its peak (top-dead-center) and relying on compression to trigger combustion.

Meanwhile, gasoline engines are spark ignition that use spark plugs to ignite a compressed mixture of air and fuel in the cylinder. The order and timing of when each spark plug receives a pulse of electricity is primarily dependent on the rotation of the crankshaft, which connects the pistons of all the engine’s cylinders, and the camshaft, which controls the intake and exhaust valves.1

Diesel engines have the highest thermal efficiency of any internal combustion engine. Typically converting around 40% of the energy stored in the fuel into useful work, diesel engines nearly double the thermal efficiency of gasoline engines, which averages around 20%. This is largely due to the higher compression ratios of diesel engines (ranging from 14:1–25:1) vs. gasoline engines (ranging from 8:1–12:1).1

Fuels, blends and energy

Although new low-carbon fuels and blends are continuously being created, two primary groups of renewable fuels in the diesel pool have emerged: biodiesel and renewable diesel.

Biodiesel—sometimes referred to as fatty acid methyl ester (FAME)—is typically produced by reacting vegetable oils or animal fats with methanol or ethanol in a transesterification process to create mono-alkyl esters of long-chain fatty acids. Biodiesel contains oxygen atoms, which makes it chemically distinct from regular ultra-low sulfur diesel (ULSD). Like ethanol blending limits in gasoline engines, most diesel engine manufacturers only support diesel blends up to B20, with higher blends requiring fuel system modifications.

Conversely, renewable diesel uses the same feedstocks as biodiesel; however, it undergoes hydrotreating, thermal conversion or biomass-to-liquid production processes. The result is a fungible renewable fuel chemically identical to ULSD that can be used as a drop-in replacement for all current diesel engines.

The differences between ULSD, biodiesel and renewable diesel are best illustrated in TABLE 1, but there are a few properties worth discussing. Unfortunately, neither renewable diesel nor biodiesel can match the energy density of ULSD. This value is calculated by multiplying the energy density per unit of mass and the volumetric density and unit conversions. However, the energy density is not the only important property related to the energy and volumetric densities. Biodiesel’s higher volumetric density is also responsible for its higher cloud point, poorer cold flow properties and improved lubricity vs. ULSD. Conversely, renewable diesel’s improved cloud point and cold flow properties can both be attributed to its lower volumetric density.

The different chemical properties of the three diesel fuel types significantly impact the resulting greenhouse gas (GHG), nitrous oxide (NOx) and particulate matter emissions.3 For example, FIG. 1 compares proprietary blends of biodiesel and renewable diesel offered by Renewable Energy Group (REG), a leading producer of biodiesel and renewable diesel.

FIG. 1. Biomass-based diesel emissions reduction estimates. Note: REG charts are based on California’s Air Resources Board assessments vs. U.S. federal ULSD. Source: REG.

Biodiesel decreases nearly every emissions category as the percentage blended in ULSD increases; however, recent studies have proven it increases NOx emissions compared to ULSD.3 Although both REG Ultra Clean RD B50 and RD B20 may still reduce NOx emissions vs. ULSD, this is a result of renewable diesel’s ability to reduce NOx emissions.

Based on this information, California’s Air Resource Board (CARB) announced a change within its Alternative Diesel Fuels regulation, which would require biodiesel blends greater than 5% to be approved by CARB.4 To mitigate this increase in NOx emissions, CARB has approved diesel formulations with at least 55%–75% renewable diesel and, at most, 20% biodiesel.

Performance impacts

While most of this article has focused on the chemistry and engineering behind using these three types of diesel fuel, companies are already seeing the economic benefits of switching to renewable fuels. After dismissing the biodiesel blend B99 based on the additional fuel heater cost of $15,000/truck, Titan Freight Systems chose a renewable diesel blend of R99 to fuel its fleet.5 After 1 MM miles, they found R99 provided the same fuel economy, while reducing lifecycle emissions by 66%, saving 1,217 t of carbon. In total, Titan Freight Systems saves about $0.021/mi—$0.015/mi from reduced exhaust replacement parts and downtime spent clearing diesel particulate filters (DPFs), $0.005/mi from a 75% oil cost reduction, and the remainder resulting from reducing the amount of DPFs required.

While saving only $0.021/mi may seem insignificant, more than 3 MM Class 8 trucks were on U.S. roads in 2019, averaging 62,571 mi, according to the U.S. Department of Energy.6 If they had been using renewable diesel, each truck would have saved an average of $1,317.77/yr, or $5.15 B/yr in savings across all Class 8 trucks. In terms of emissions reductions, if all Class 8 trucks had used R99, it would have saved more than 297 MM metric tpy of carbon dioxide (CO2). For context, in 2018, Florida had the third-highest CO2 emissions in the U.S., emitting 242.5 MM metric t of CO2, according to the U.S. Energy Information Administration.

Although renewable diesel has rapidly grown in popularity, some blenders have started to mix the two renewable fuels. For example, REG has created a blend of both biodiesel and renewable diesel (i.e., REG Ultra Clean Diesel) to capture the best attributes of each. This fuel can reduce emissions across the board, while offering improved engine starting, lubrication, reliability, engine life and more complete combustion.

Looking forward

As U.S. emissions standards continue to tighten, renewable fuels will play a crucial role in the energy transformation of the country. Utilizing the existing refining and distribution infrastructure to fuel vehicles that require little to no modification, renewable diesel and biodiesel have already overcome several hurdles associated with electric vehicles (EVs). These renewable fuels can reduce lifecycle GHG emissions even more than EVs since EVs derive their electricity from natural gas, which produces 195% higher GHG emissions on a lifecycle basis than REG B100.

U.S. federal and state governments have realized the potential benefits of biodiesel and renewable diesel and are incentivizing the production of both. A federal blenders tax credit of $1/gal of biomass-based diesel produced was renewed in late 2019,7 and a new Congressional bill hopes to extend the program through 2025. The RFS-2 program offers 1.5 renewable identification number (RIN) credits for every gallon of biomass-based diesel produced, which includes biodiesel and renewable diesel. Renewable diesel accounts for 1.7 RINs, while biodiesel accounts for 1.5 RINs. Although RIN prices are market-based, they have recently made headlines after reaching all-time highs in June.

LCFS programs also offer credits (around $177/credit in California) based on the total tons of carbon removed compared to a baseline carbon intensity (CI). Oregon and British Columbia, Canada, have followed California’s lead in enacting an LCFS, with more in development in states like Minnesota, New York and Washington.

While biodiesel and renewable diesel are both increasing in production capacity, they still have a long way to go before they can replace ULSD. In 2019, the U.S. consumed approximately 47.2 Bgal of diesel fuel. In the same year, renewable diesel and biodiesel production capacity was 0.6 Bgpy and 2.514 Bgpy, respectively. Biodiesel is clearly leading in current production capacity; however, the U.S. EIA forecasts renewable diesel production capacity to increase to 5.1 Bgpy in 2024 (FIG. 2).

FIG. 2. Existing and expected U.S. renewable diesel production capacity, 2010–2024. Source: U.S. EIA.

Alternative diesel fuels like renewable diesel have proven to be a sustainable, renewable replacement for ULSD. The increased engine performance, emissions reductions and growing production capacity are all steps towards a better, cleaner future. However, with any new change comes new challenges. Partnering with experienced energy consultants removes that uncertainty throughout the transition and ensures that your organization can overcome those challenges. Understanding and capitalizing on all the available incentives is the difference between operating at a loss and becoming an industry leader. HP


  1. Diesel engines vs. gasoline engines,, online:
  2. Yoon, J. J., “What’s the difference between biodiesel and renewable (green) diesel?” Advanced Biofuels USA, March 2011, online:
  3. Jääskeläinen, H. and A. Majewski, “Effects of biodiesel on emissions,” Dieselnet, March 2021, online:
  4. CARB, “Potential 15-day changes to the amendments to the regulation on the commercialization of alternative diesel fuels, approved on April 23,” 2020, CARB webinar workshop, June 4, 2020, online:
  5. H. Aaron, “Innovator: Titan Freight exec plans to bridge the divide to zero-emissions,” CCJ Digital, February 2021, online:
  6. U.S. Department of Energy, “Average annual vehicle miles traveled by major vehicle category,” February 2020, online:
  7. Hanson, S., “U.S. biomass-based diesel tax credit renewed through 2022 in government spending bill,” U.S. EIA, January 2020, online:

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