Have you given biodiesel a fair shake when exploring alternative fuel options? If not, you may be missing out on an easy way to address several concerns at once. Let’s break down exactly what biodiesel is, why it has been growing in popularity and — most importantly — how it can beneﬁt you as a fuel marketer.
The Basics of Biodiesel
Biodiesel is an advanced biofuel that is renewable and biodegradable. It is a cleaner-burning, drop-in replacement for petroleum diesel. Biodiesel is primarily produced from animal fats, inedible corn oil, recycled cooking oil and vegetable oils. Skilled producers can create highquality biodiesel that meets customer speciﬁcations from a variety of feedstocks, something that’s known as feedstock ﬂexibility. This can help protect the fuel from much of the volatility the petroleum market experiences.
Now, back to that “drop-in” part. Biodiesel is most commonly blended with either petroleum or renewable diesel in varying percentages, usually 5 percent to 20 percent. You can blend it yourself (keep reading for information on the tax credit related to this), or you can buy it already blended. Buying and selling preblended fuel doesn’t require any changes to your infrastructure. Even if you want to do your own blending, any required infrastructure upgrade will typically pay for itself pretty quickly.
The great part for your ﬂeet customers is that they don’t need to modify anything to take advantage of biodiesel blends. They can run on biodiesel blends up to B20 — that’s 20 percent biodiesel, 80 percent petroleum diesel — in their existing diesel vehicles, and more and more ﬂeets are exploring the use of even higher blends.
Much of the acceptance among ﬂeets is due to biodiesel’s quality and performance. It is recognized by ASTM International, which has created speciﬁcations for the fuel with ASTM D6751. The biodiesel spec requires a minimum Cetane number of 47, whereas the petroleum diesel spec is 40. Higher Cetane equals a shorter ignition time and better engine performance.
Biodiesel also adds lubricity that is lacking in ultra-low-sulfur diesel (ULSD), which helps fuel injection systems and engines run smoother, quieter and cooler. A blend as low as 2 percent biodiesel can double a fuel’s lubricity.
Even diesel technicians can vouch for biodiesel’s performance. We spoke to a tech with more than 15 years’ experience who said the issues he expected never happened when his ﬂeet started incorporating biodiesel into their operations.
“It was very surprising that the failures and added work I expected to see just didn’t happen,” said Joe Siadak of Mahoney Environmental, which has a ﬂeet that works nationwide collecting and recycling used cooking oil from restaurants. “It was as if we made no change at all.”
Winning the Popularity Contest
While electric vehicles may be the shiny new object, the diesel engine will continue dominating the market — and the trucking industry — for a long time.
With diesel engines so widespread, ﬂeets are turning to biodiesel to help them reduce emissions while keeping performance strong. U.S. biodiesel consumption grew 597 percent from 2010 to 2019. That’s growing demand for a product that you could be oﬀering.
On top of that, a survey by the NTEA — the Association for the Work Truck Industry — found biodiesel to be the most widely used alternative fuel among work truck ﬂeets and the one in which they’re most interested.
This isn’t just about ﬂeet usage. As mentioned above, manufacturers are increasingly releasing diesel models of their most popular passenger vehicles. Some of the newest options include the Chevy Tahoe and Suburban, GMC Yukon, and Jeep Wrangler Rubicon and Gladiator. Other brands have already been on the market for a few years, including the Ford F-150, Ram 1500, Chevy Silverado 1500 and Mazda CX-5.
It’s also worth noting that biodiesel has one of the lowest average carbon intensity (CI) scores, which is a number set by the California Air Resources Board as a measure of greenhouse gas (GHG) emissions during the full lifecycle of the fuel. Compared with petroleum diesel, biodiesel reduces lifecycle GHGs by up to 86 percent. Particulate matter is reduced by approximately 60 percent and total hydrocarbons by approximately 70 percent. As sustainability goals and regulations pick up steam across the nation, characteristics like this become more important every day.
So, What’s in It for You?
The recently reinstated Biodiesel Tax Credit (BTC) is a $1-per-gallon credit that helps lower the cost of biodiesel. It is a blender’s tax credit, but the savings are spread through the entire supply chain, from feedstock companies to the fuel producer to the truck stop to the end user.
So, by oﬀering biodiesel blends, you should beneﬁt from the lower price of biodiesel no matter whether you’re the blender or you’re buying blended fuel. If you’re not a qualiﬁed blender, talk to your fuel supplier about how the BTC aﬀects what you pay. The bottom line, though, is that the cost of your goods is lower, which can make you more competitive with your customers, including the price at the pump if you have retail locations.
Even if you already oﬀer biodiesel, you may want to evaluate whether going to higher biodiesel blends would beneﬁt you. When there are positive blending economics, which the BTC contributes to, biodiesel is less expensive than diesel. So, the higher your blend, the more you’ll save and the more competitive you can be on fuel prices.
It’s also smart to diversify your oﬀerings to reduce the risk of being dependent on any one fuel and to serve more types of customers.
Making the Switch
As you can see, biodiesel is a simple way to meet or exceed multiple goals and demands. Still want to know more? Talk with your suppliers, customers and other partners. Between biodiesel’s feedstock ﬂexibility, strong performance, emission reductions, ﬁnancial opportunities and growing popularity, you just may ﬁnd the morsel of info you need to ﬂip the switch.
by Steve Klein, Senior Manager, Marketing, REG, PMAA Corporate Platinum Partner
Steve Klein is senior manager, marketing, at Renewable Energy Group (REG), which is North America’s largest producer of biodiesel. He leads the company’s eﬀorts to promote the economic and value-added beneﬁts of integrating biodiesel into distributor and retailer fuel programs. REG is leading the energy industry’s transition to sustainability by transforming renewable resources into high-quality, cleaner fuels. REG utilizes an integrated procurement, distribution and logistics network to operate 13 bioreﬁneries. Learn more about Renewable Energy Group at www.regi.com.