Devandran Karunakaran’s Analysis of Renewable Diesel in the 2020s

The 2020s have already become a pivotal decade for the future of renewable diesel and biodiesel. Devandran Karunakaran has several predictions based on the current trends of this vital corner of the energy market as an expert in the supply chain for biodiesel products. Let’s begin with an introductory look at the different types of energy-saving diesel and how their markets are shifting.

Renewable Diesel Vs. Biodiesel

Both renewable diesel and biodiesel are made from similar materials, typically pressed oil from edible foodstuffs and animal fats. However, their production methods vary considerably. According to Devandran Karunakaran, renewable diesel is made at refineries with a cracking process similar to oil but applied to biomatter. This creates a refined product, as well as bio-byproducts, that can be used in other sectors of the energy market. While production is more expensive and energy-intensive, renewable diesel can often use the same infrastructure as traditional diesel, which saves time and money.

Biodiesel uses a simpler production method via transesterification, involving methanol and catalysts to initiate chemical change and produce biodiesel. The process is more affordable and easier to get started in almost any condition, but the quality of the final product can be an issue. Biodiesel is cut with other fuels to address this problem, but that increases the cost of the fuel.

Demand for both renewable diesel and biodiesel is on the rise globally, leading to increased production and new questions about infrastructure and support.

Increased Demand Will Create Important Agricultural Choices

Renewable diesel, in particular, is in demand as a way to lower carbon footprints and meet green goals since it’s one of the easiest sources of renewable energy to transition to. However, Devandran Karunakaran notes that this increased demand also creates tensions with agricultural markets and the ability to meet demand.

In the United States, that means issues with soybean production, typically alternating with corn, creating potential volatility. Producers are finding the value of diversifying into global sources, such as palm oil, although this does create larger carbon footprints. Devandran Karunakaran notes this puts even more focus on Singapore, a global leader in renewable diesel and the center for its supply chains.

Uncertainties Slowed Growth, But Recovery is On the Way

COVID-19 and related issues took the emphasis off renewable/biodiesel production, lowering projections significantly (particularly in 2020). However, we are starting to see that change, with new predictions showing a return to slow but steady growth. Devandran Karunakaran mentioned above that demand is on the rise for renewable diesel in particular, but both types of diesel have been helped by the war in Ukraine, which put new emphasis on the need for energy independence, especially when it comes to fuels.

Major Centers of Growth

Predictions out to 2026 show reliable growth alongside other key markets like vegetable oils. Devandran Karunakaran explains that the two major centers for biodiesel and related fuels remain the United States and China. The United States market is expected to reach $5.2 billion, more than double the predictions for the Chinese market. Canada and Europe will also become more active in the industry.