According to the U.S. Energy Information Administration (EIA), the United States saw a significant increase in biofuel output capacity last year, primarily driven by a surge in renewable diesel production. Five new renewable diesel plants opened in 2023, raising the country’s output by 44% to 282,000 barrels per day (bpd).
The new facilities included two on the U.S. Gulf Coast and two on the West Coast, with one additional plant on the East Coast, bringing the total number of renewable diesel plants in the U.S. to 22. The capacity in the West Coast alone has increased to 82,000 bpd, which is two and a half times higher than the previous year.
Fuel manufacturers are rapidly expanding their renewable diesel capabilities as they adapt to a market increasingly focused on sustainable energy sources. While renewable diesel is more costly to produce, its production has been heavily subsidized by both federal and state governments. However, this expansion has adversely affected some biodiesel producers, who can only use their products as a blend for renewable diesel and receive lower financial incentives.
Over the past year, three biodiesel plants have closed—one each on the East Coast, West Coast, and Midwest. Analysts predict that more biodiesel plants may shut down unless they receive additional government support. Despite these closures, biodiesel output capacity remained stable at around 136,000 bpd.
In terms of ethanol, the EIA reported a slight increase in output capacity, with one plant closing on the East Coast but a larger facility opening on the Gulf Coast, resulting in a 2% boost to a total capacity of 1.18 million bpd across 187 operational plants.