U.S. renewable energy market could face feedstock deficit

Energy from material from plants and animals, or biomass, currently estimates for approximately 5% of U.S. energy usage, somewhat more than wind and solar power. Most U.S. energy use is still based on fossil fuels like petroleum and natural gas.

The United States and other nations were trying to decrease overall carbon emissions and lowered the use of high-polluting fossil fuels. Refiners, farmers, and agricultural giants aspire to gain a foothold in fuel supply by generating biomass fuels.

But biomass-based fuel generation could meet limits, as farmers need to harvest more soy and other products to increase demand.

Simultaneously, companies that handle and treat animal fats or spent cooking oil also would require to expand.

Fuels like biodiesel, renewable diesel, and sustainable aviation fuel pick from the equal feedstock supply. Analysts have cautioned there might not be enough lower-carbon intensive feedstock to keep up.

Demand for soybean oil alone is required to far exceed supply by 2023, as stated by a BMO Capital Markets report from October 2020. The financial services provider determines an incremental demand of 8 billion pounds of soybean oil by 2023 because of an expansion in renewable diesel production.

As stated by Energy Information Administration’s Annual Energy Outlook, renewable energy made up 9.11 quadrillion British thermal units, or 9.8%, of the entire energy consumption in 2020. By 2024, that’s assumed to improve to 12.23 quadrillion Btu, or 12.5%, of total energy consumption.

RENEWABLE PRODUCTION ON THE RISE

Biomass can generate fuels like renewable diesel, biodiesel, sustainable aviation fuel, and ethanol.

Renewable diesel production volume is claimed to nearly quintuple to approximately 2.65 billion gallons (63 million barrels) by 2024, Goldman Sachs declared in October. The report revealed that that would demand an added 17 billion pounds of feedstock, output friction between existing biodiesel and food customers.

As stated in a Reuters analysis of Environmental Protection Agency data, the United States generated 533 million gallons of renewable diesel in 2020.

As affirmed by the Energy Information Administration’s Annual Energy Outlook, U.S. biodiesel output is approximately 110,000 barrels per day, overshadowed by oil refineries, which last year held an operable crude distillation capacity of about 19 million barrels per day, as stated by EIA.