Renewable diesel economics are captured in this data-file, requiring a price of $4.5-5/gallon (about $200/bbl), for a green diesel plant costing $35M/kbpd to generate a 10% IRR while hydroprocessing $1,000/ton feedstocks. Please download the data-file to stress-test renewable diesel economics, biodiesel economics and input costs.
Our forecasts are that global liquid biofuels production will expand from 3.2Mbpd in 2024 to 3.8Mbpd by 2030, especially driven by green diesel. Hence what are the costs of renewable diesel production, and broader biodiesel production? Answers are modeled in this data-file.
Our base case is that a US renewable diesel facility must achieve $4.5-5.0/gallon sales revenues (which is c$200/bbl) as it commercializes a product with up to 75% lower embedded emissions than conventional diesel, transesterifying and hydrogenating fatty acids. This can be used as a drop-in fuel for road vehicles, or upgraded further into SAF.
Similarly, a US bio-diesel facility must achieve $3.6/gallon sales revenue (which is c$150/bbl) as it commercializes a product with around 60% lower embedded emissions than conventional diesel. A detailed breakdown of biodiesel CO2 intensity is also included in the model.
The models are most sensitive to input feedstock prices, then conversion efficiencies, and only secondarily to other cost lines. Hence detailed cost data are broken out from companies, projects and technical papers.
One tab of the model captures the collection costs of used cooking oil. Another tab tracks feedstock prices over time. To understand feedstock costs from first principles, please also see our model of oil crop economics.
Our notes from technical papers are also captured in the data-file. Economics can be disaggregated as a function of feedstocks, feedstock:product ratios, heat inputs, gas prices, electricity consumption per gallon, electricity prices, utilization rates, capex costs, other opex costs, tax rates and other reagents (e.g., hydrogen, methanol, sodium hydroxide, hydrochloric acid, etc).
Another excellent reference is market pricing data from Neste, one of the world’s leading producers of renewable diesel.
Capex costs are estimated on both a top-down and a bottom-up basis. The average greenfield is costing around $30M/kbpd (details in the data-file), while we have also disaggregated typical costs over 25 different input lines.