Renewable diesel wins over heavy-duty trucking companies

Companies that operate heavy-duty trucks with net zero goals are turning to renewable diesel in droves.

Why it matters: While commercial electric vehicles are gaining traction in some sectors like delivery vans and transit buses, big battery-powered trucks for specific industrial sectors are still hard to find.

Driving the news: Companies took advantage of this week's COP28 to announce low-carbon transportation milestones.

• Mexican building materials company Cemex said it now has over 1,000 heavy-duty trucks powered by a combination of renewable diesel and natural gas.
• In Dubai, Cemex, which has a target to become net zero by 2050, showed off a prototype of a fully electric mixer truck but said the reality is that "fully electric heavy-duty trucks are not yet widely available on an industrial scale."

Meanwhile: Mining giant Rio Tinto announced that a copper operation in Utah would replace its diesel use with renewable diesel, including for 90 haul trucks and all heavy machinery.

• Rio Tinto, which also has a net zero goal by 2050, likewise said the choice to use renewable diesel was a first step on the way to a longer-term goal to use battery electric haul trucks.

Zoom in: The market for renewable diesel in the U.S. is booming.

• According to Finnish renewable fuel provider Neste, which makes renewable diesel, North America is already the largest renewable diesel market in the world, and demand is growing 2.5 times from 7 million tons in 2023 to 18 million tons by 2030.
• Because renewable diesel can be used in existing infrastructure, it's a relatively easy swap to make.
• Demand is being driven by both sustainability goals and regulations like California's Low Carbon Fuels Standard and the federal Renewable Fuel Standard. The Energy Information Administration says almost all renewable diesel in the U.S. is consumed in California.

Of note: Last year, renewable diesel consumption in the U.S. outpaced biodiesel consumption for the first time.

Yes, but: When it comes to biofuels the devil is in the details: feedstocks.

• While some companies are using waste, like used cooking oil and animal fats, others are opting for soybean oil.
• Biofuels already make up 40% of soybean oil demand in the U.S., and as more renewable diesel production plants come online, that number could soar.
• Biofuels become more complicated when they use feedstocks that are part of crops. Soybeans compete with corn for production on farmland.

Thought bubble: Renewable diesel can significantly lower carbon emissions associated with companies' transportation in the short term, but fuel producers should prioritize waste as a feedstock.

• In the longer term, all companies aiming to reduce transportation emissions need a plan to incorporate electric vehicles.