Fleet FYIs: A Podcast by Utilimarc

Is Renewable Diesel the Cheaper, Greener Alternative to Biodiesel? | Utilimarc Fleet FYIs

November 04, 2022 Utilimarc Season 3 Episode 35
Fleet FYIs: A Podcast by Utilimarc
Is Renewable Diesel the Cheaper, Greener Alternative to Biodiesel? | Utilimarc Fleet FYIs
Show Notes Transcript

Is renewable diesel the cheaper, greener alternative to biodiesel? Find out on this episode of #UtilimarcFleetFYIs.

Show notes for today's episode can be found at: https://www.utilimarc.com/blog
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Gretchen Reese (00:24):

Hey there. Welcome to the Fleet FYIs podcast, the weekly podcast by Utilimarc that reveals how you can make the most of your data for smarter fleet management. My name is Gretchen, and every week you'll hear from me or some of the industry's finest in candid conversations that will not only shed some light on over two decades worth of fleet data insights, but also some of the industry's hottest talking points and key metric analysis with the aim to help you better understand your fleet from every angle.


But before we begin, if this is the first time you've heard our show, thanks for stopping by. I'm so glad you decided to come along for the ride with us. But I've got a quick favor to ask you. Once you finish today's episode, if you could take a few minutes to leave us a review on your favorite podcasting platform, we would really appreciate it. Give us a rating, five stars, I hope, or tell us what you liked or leave us a comment or a question about what you've heard in today's episode. If we haven't yet covered a topic that you're interested in hearing more about, let us know. We would be happy to go over it in detail in a later show.

Speaker 2 (01:35):

Hello everyone and welcome back to another episode of the Fleet FYIs podcast. Before we dive into today's show, I really wanted to share some exciting news with you all. So Utilimarc will be back at the Fleet Forward Conference in Santa Clara next week, November 8th through the 11th. And the best part is we'll be presenting in a panel on environmental social governance or ESG, for those of you more are familiar with the acronym. So if you're headed to Fleet Forward next week, be sure to let me know. Again, you can tag us on LinkedIn, you can send me an email, but we are so excited to connect with you all again and get talking all about all things sustainability.


Anyways, now that we've covered Fleet Forward, the key topic of today's episode, I wanted to talk about renewable diesel and renewable diesel is separate to biodiesel, and I'll get into what that means in just a second here. But the reason I'm so excited about this new alternative fuel type or greener alternative fuel type to biodiesel is that one, Utilimarc has a client that's currently piloting this new type of fuel and will be able to share more on how that works in the coming months as that pilot starts to roll out, but it also provides another way to turn waste into fuel itself. So something that we can reuse and recycle. The little ditty that we all are [inaudible 00:02:59] a little, reduce, reuse, recycle. Kind of the same purpose here. So it seems that every few years a new "green fuel" is hitting the market here, with hope and promise of becoming the long-term successor to our traditional fossil fuels.


Ethanol was before that, e-fuel biodiesel, and now we're working with renewable diesel in general. And a lot of these are all natural gas in different forms. And now, whilst not all of these fuels are actually renewable, what makes them "green" is their lower emissions output when compared with more common fuels like gasoline or diesel. Many of these are actually derived from biomass, which can be all different kinds of organic matter, which makes them renewable in the addition to being low emissions. And the cool part is, again, you're using waste or it's organic matter, so it's something that can regenerate itself over time.


And these alternative fuels can be easily mixed up as they share many similarities and many uses, but each has very different chemical compositions that affect their performance in practicality and internal combustion engine vehicles. For example, biodiesel and renewable diesels sound like different names for the same alternative fuel. And to be fair, they are made from the same substance. However, because of how they are each processed, we end up with two completely different fuels, which I think is cool. So let's talk about how they're different, what makes them the same, and basically what the heck is biodiesel or renewable diesel all about? Let's dig in.


So biodiesel or renewable diesel, they're both sustainable alternative fuels that are produced from repurposed organic waste such as animal fats and cooking oils, which I think is super cool. Hello, trying to eliminate restaurant waste. Awesome effort in my opinion, but the waste in which they're processed, give them completely different chemical compositions, which is what I really wanted to touch on. So bio diesel takes three ingredients to make. The animal fats or oils and alcohol, which is typically ethanol or methanol and a catalyst. Now this fuel is made through a process called transesterification. Try and say that three times fast, which separates the glycerin from the fat or the oil itself. The result is a clean burning fuel grade diesel replacement that can be used in many large diesel engines with pretty much no modifications necessary. Now, renewable diesel is slightly different in that it's derived from the same types of biomass as a biodiesel and goes through a similar process as petroleum diesel, which makes the two chemically identical.


This is a very attractive option for fleets that worry about encountering performance issues if switching to alternative fuels. And the cool thing is essentially conventional diesel and renewable diesel are both hydrocarbons and because of this, fleets using renewable diesel won't have to worry as much about the challenges regarding freezing temperature and storage. Now, if we look into the prices and performance here, because obviously I know that price can be a big barrier when it comes to adopting alternative fuels. If you look at hydrogen fuel for example, just the cost of that alone is so much higher than diesel or petrol so it's no wonder why it's not as widely adopted, at least until the price per gallon comes down. But anyways, in terms of biodiesel, customers have two options. You have B99 or 100 or B20, pure biodiesel or a blend.


Well, B 100 biodiesel is the more sustainable eco-friendly option. There can be up to a 10% energy loss when you're actually using this fuel in general. B 20 is a blend of biodiesel to petroleum diesel at a 20:80 ratio, kind of similar to how ethanol, that corn-based fuel, is being used with natural petroleum now, which significantly boosts energy efficiency but doesn't burn nearly as cleanly as the pure biofuel would. So for renewable diesel users, no blending at all is required to achieve the same performance as conventional petroleum diesel. Fleets also wouldn't have to modify any vehicle equipment or fueling infrastructure should they decide to make the switch, which can be a really attractive option for people looking for more alternative fuels. And that transition can happen seamlessly and immediately because like I said, you don't have to change any infrastructure or anything in your vehicles itself to be able to use this renewable diesel. Win-win, in my opinion.


And in the US both of these diesel replacements are used primarily in California. So in July of 2022 at the peak of recent fuel inflation, the average prices in the state, if we want to look at it straight across the board, you have petroleum diesel at $6.55 cents a gallon, biodiesel, which is that B 20 blend at $6.10 cents a gallon, biodiesel as the B 100, $6.08, and renewable diesel is $6.51 cents a gallon. So it's pretty much even in terms of petroleum diesel and renewable diesel. And then obviously, the biodiesel blends are also even in that respect. But because of the lower energy efficiency, you do have that slightly lower price there. Evidently both of these biofuels are cheaper than their fossil fuel counterpart. But again, like I said, they are that kind of pretty steady price point and biodiesel still is the cheapest of all when we're looking at the different types of diesel fuels available. For both fuels, however, changing in price obviously directly depends on the agriculture industry and what resources there are available to actually make this fuel in itself.


To wrap this episode up, I'd like to chat about renewable diesel on the road. So with renewable diesel being newer to the market than biodiesel, it is subsequentially produced and used far less today than mainstream diesel would be. And as fleets start to learn about it, start to study it, and start to understand whether or not it could be a fit for their fleet, they realize a massive opportunity that it creates in terms of boosting both fleet sustainability and also reducing fuel costs, which is awesome. The city of Oakland is one fleet that jumped at the opportunity. The city has been using exclusively renewable diesel in all of their diesel powered vehicles, on and off-road equipment since 2015. And the adoption of this fuel helps the fleet avoid around 250,000 gallons of petroleum diesel and 1,500 tons of greenhouse gas emissions every single year.


As more fleets start to strive to achieve ambitious sustainability goals, renewable diesels yet another option in the tool belt just to make that possible. So if you're interested in learning a little bit more about what renewable diesel can do for your fleet, if it would be a suitable option, or if you just have any questions at all about what the heck it means and potentially even the composition, let me know. I'd love to hear from you. You can send me an email, tag me on LinkedIn, use the hashtag Utilimarc Fleet FYIs, or as you always know, the option of the carrier pigeon is always available. Anyways, that's all from me this week. I will chat to you again next week with one, a live update from the Fleet Forward and Fleet Safety Conference in Santa Clara, California, and also the regularly scheduled episode on Friday of next week. Until then, I'll see you next time. Ciao.

Gretchen Reese (11:25):

Hey there. I think this is the time that I should cue the virtual hi-five because you've just finished listening to another episode of the Fleet FYIs podcast. If you're already wanting more content, head over to utilimarc.com, which is Utilimarc with a C, U-T-I-L-I-M-A-R-C.com for this episode's show notes and extra insights coming straight from our analyst to you. That's all from me this week, so until next time, I'll catch you later.