Renewable diesel is a fuel made from fats, oils, and greases that has been processed to be chemically identical to petroleum diesel. Unlike biodiesel, which has a different molecular structure and can only be blended in limited amounts, renewable diesel is a true “drop-in” replacement. You can pump it into any diesel engine, ship it through existing pipelines, and store it in the same tanks without a single modification.
What makes it genuinely different from other biofuels is what happens during production. The process strips away oxygen and rearranges the molecules so thoroughly that the end product is indistinguishable from the fossil fuel it replaces, just with a dramatically smaller carbon footprint.
How Renewable Diesel Differs From Biodiesel
The names sound interchangeable, but renewable diesel and biodiesel are fundamentally different fuels. Biodiesel (technically called fatty acid methyl ester, or FAME) still contains oxygen atoms locked into its molecular structure. That oxygen affects how the fuel burns, how long it lasts in storage, and how much of it you can blend into a tank before engine warranties start to get uncomfortable. Most diesel engines can handle biodiesel blends up to about 20% without issues, but going higher introduces risks.
Renewable diesel contains only hydrogen and carbon, making it a true hydrocarbon fuel, structurally the same class of molecule as petroleum diesel. Its chemical signature is dominated by straight-chain hydrocarbons in the C15 to C18 carbon range, with very few of the aromatic compounds found in petroleum diesel. This matters because fewer aromatics means cleaner combustion and lower particulate emissions. Because the chemistry matches conventional diesel so closely, renewable diesel can be used at any blend ratio, from 1% to 100%, in any diesel engine without modification.
What It’s Made From
Renewable diesel starts with biological fats and oils. In the United States, the most common feedstocks are used cooking oil and inedible animal fats left over from meat processing. Soybean oil is another major source. Outside the U.S., rapeseed oil, sunflower oil, and palm oil play larger roles. Algae remain a potential future feedstock but haven’t reached commercial scale.
The choice of feedstock has a significant impact on the fuel’s environmental profile. Waste-based feedstocks like used cooking oil and animal tallow don’t carry the land-use burden associated with growing crops specifically for fuel. This distinction becomes important when calculating lifecycle emissions, as waste feedstocks consistently produce the cleanest results.
How It’s Produced
The dominant production method is called hydrotreating, sometimes referred to as hydrodeoxygenation. The process works by reacting fats and oils with hydrogen gas in the presence of a catalyst at high temperatures and pressures. The hydrogen strips oxygen out of the fat molecules and saturates the carbon chains, converting biological lipids into the same paraffinic hydrocarbons found in petroleum diesel.
The catalysts used are similar to those already employed in petroleum refineries to remove sulfur from crude oil. In fact, several renewable diesel plants in the U.S. are converted petroleum refineries that were retrofitted for this purpose. Hydrotreating isn’t the only route. Gasification, pyrolysis, and other thermochemical processes can also produce renewable diesel from a wider range of biomass, but hydrotreating with fats and oils remains the commercial standard.
Greenhouse Gas Reductions
The climate case for renewable diesel depends heavily on what it’s made from. When produced from oilseed crops like soybean, canola, or carinata, lifecycle greenhouse gas emissions drop by 40% to 69% compared to petroleum diesel, after accounting for the land-use changes involved in growing those crops. Without factoring in land-use change, the reductions climb to 63% to 77%.
Waste-based feedstocks perform even better. Converting used cooking oil, animal tallow, or distillers corn oil into renewable diesel achieves reductions of 79% to 86% compared to petroleum diesel. These feedstocks score so well because they carry no upstream agricultural emissions. Nobody planted a crop or cleared a field to produce them; they already existed as waste. This is a major reason the industry has increasingly shifted toward waste oils and fats as primary inputs.
Engine Performance and Cold Weather
Renewable diesel generally performs as well as or better than petroleum diesel in engines. Its high concentration of straight-chain hydrocarbons gives it a higher cetane number, which is the diesel equivalent of an octane rating. A higher cetane number means the fuel ignites more readily, producing smoother combustion, less engine noise, and potentially lower emissions of nitrogen oxides and particulate matter. The near-absence of aromatic compounds and sulfur contributes to cleaner exhaust as well.
Cold weather performance is one area where fuel chemistry matters a great deal. All diesel fuels can gel or cloud at low temperatures as wax crystals begin to form. Renewable diesel’s cold flow properties vary depending on the feedstock and how the fuel is processed. Producers can adjust the severity of hydrotreating or use isomerization (a process that branches the straight carbon chains) to lower the temperature at which the fuel starts to gel. This tunability is an advantage over biodiesel, which tends to have less favorable cold flow characteristics, particularly when made from animal fats or palm oil.
U.S. Production Scale
Renewable diesel production in the United States has grown rapidly. Estimated total capacity reached about 4.3 billion gallons in 2023, rose to 5.1 billion gallons in 2024, and is projected at 5.2 billion gallons for 2025. By the end of 2026, 22 renewable diesel plants are expected to be operating across the country. Growth has leveled off somewhat, with total capacity projected to remain roughly flat through 2026 after years of aggressive expansion.
This buildout was driven largely by policy incentives, particularly California’s Low Carbon Fuel Standard and the federal Renewable Fuel Standard, which create financial credits for fuels with lower lifecycle emissions. The combination of these programs made renewable diesel production profitable enough to justify converting multiple petroleum refineries and building new dedicated plants. The waste-feedstock pathways generate the most valuable credits, reinforcing the industry’s preference for used cooking oil and animal fats.
Why It Qualifies as a Drop-In Fuel
The term “drop-in” means renewable diesel requires zero changes to engines, fuel systems, pipelines, storage tanks, or fueling stations. Because its molecular structure matches petroleum diesel, it meets the same fuel specification that governs conventional ultra-low sulfur diesel. Fleet operators can switch to renewable diesel without notifying engine manufacturers, retraining mechanics, or modifying equipment. This is a practical advantage that biodiesel cannot match, since biodiesel blends above certain thresholds require different gaskets, seals, and fuel management strategies.
For trucking companies, transit agencies, and other large diesel users, this compatibility eliminates the capital costs and operational complexity that typically accompany a fuel switch. The fuel shows up in the same tanker trucks, goes into the same underground storage tanks, and flows through the same pumps. The only thing that changes is the carbon intensity of every mile driven.