As the U.S. renewable diesel and sustainable aviation fuel (SAF) sectors prepare for 2025, CoBank has forecasted a modest increase in production capacity. Specifically, renewable diesel production is expected to rise from 210,000 barrels per day in 2024 to 230,000 barrels per day in 2025. Additionally, renewable diesel capacity is projected to grow by 100 million gallons per year, reaching a total of 5.2 billion gallons [bb9203f9].
SAF production is also anticipated to see significant growth, potentially reaching nearly 50,000 barrels per day in 2025. This surge is largely attributed to federal tax incentives and low carbon fuel policies that are driving the market forward [bb9203f9]. However, the industry faces challenges, particularly due to ongoing policy uncertainty surrounding the Renewable Fuel Standard (RFS) and small refinery exemptions (SREs), which could hinder growth prospects [bb9203f9].
In a related development, Congress passed a short-term funding bill on December 17, 2024, which includes provisions for E15 sales and an extension of the Farm Bill. These legislative actions may provide some stability and support for the biofuels sector as it navigates the complexities of federal regulations [bb9203f9].
The ethanol industry, meanwhile, is also bracing for changes as it looks ahead to 2025. CoBank has predicted that production will stabilize at around 1.05 million barrels per day, but political and regulatory uncertainties continue to loom large. The incoming Trump administration is expected to delay the announcement of new RFS renewable volume obligations for the years 2026 to 2029, which could create further instability in the market [a14cf0d8].
Despite these challenges, U.S. ethanol exports are projected to reach record levels in 2024, with Canada identified as the primary destination for these shipments. However, potential tariffs and increasing competition from Brazil may pose obstacles to continued export growth [a14cf0d8].
As the industry navigates these challenges, the White House Office of Management and Budget (OMB) published the Fall 2024 Unified Agenda on December 13, outlining upcoming regulations that could further shape the landscape for biofuels in the United States [a14cf0d8].