Biofuels Production Capacity Grows at Much Slower Rate in 2024

­Biofuels production slowed to a trickle last year, proving that it might not be the silver bullet (or the green superstar) its advocates were hoping for.

The news is more than a little disappointing – according to the U.S. Energy Information Administration (EIA), renewable diesel and other biofuels production capacity increased just 391 million gallons per year (gal/y) in 2024, and that modest 3% increase is less than 1/3 the growth seen in 2022 and 2023.

What the heck happened??

Last year, Phillips 66 converted its Rodeo refinery to 100% biofuels (for an overall capacity of 767 million gal/y) and a new Renewable Fuels LLC plant opened in Bakersfield, California.

But as the EIA notes, those additions were partially offset by four facilities’ loss of capacity – “Monroe Energy and Chevron stopped co-processing renewable diesel at their Trainer, Pennsylvania, and El Segundo, California, refineries, respectively. And Vertex Energy and Jaxon Energy closed plants in Mobile, Alabama, and Jackson, Mississippi, respectively.”

We’ve also seen biofuel margins and petroleum refining margins go down since 2020, and the entire enterprise carries a number of intrinsic risks and disadvantages – like competing with food crops for land usage (with the potential to negatively impact regional food security), water use, environmental risks related to fertilizer, deforestation, and more.

In some cases, the overall biofuel venture can use more fossil fuels than it saves.

The EPA, itself, mentions “land and water resource requirements, air and ground water pollution. Depending on the feedstock and production process, biofuels can emit even more GHGs than some fossil fuels on an energy -equivalent basis.”

The silver lining is that, unlike renewable diesel and biodiesel, U.S. fuel ethanol production capacity actually increased in 2024 compared to years’ past. But we’re starting to fully appreciate that biofuels might not be the renewable energy solution many of us were hoping for.