Officials from the U.S. Departments of Agriculture and Energy told Reuters that they intend to update two closely monitored monthly reports to reflect the rapid growth of renewable diesel, a clean-burning fuel made from soy and other fats and oils.
The rising demand for renewable diesel is part of a broader global shift to green fuels, and it could raise prices for the crops it is made from, such as soybeans and canola.
An agency official told Reuters that the U.S. Department of Agriculture (USDA) expects to change how it records soybean oil used in biofuel in its monthly World Agriculture Supply and Demand Estimates (WASDE) study as soon as this spring.
Keith Menzie, an economist at USDA’s World Agricultural Outlook Board, said the changes would be made only after the U.S. Energy Information Administration (EIA) starts publishing more accurate data on the renewable diesel market.
According to Reuters, the EIA plans to start including renewable diesel data in its Petroleum Supply Monthly survey and intending to publish data for January by the end of this month.
The unusual adjustment to USDA’s WASDE survey, which is regarded as the global gold standard of agricultural commodities data, will recognise the strong demand potential for soybean oil when the U.S. soybean supplies are at their lowest in years.
Renewable diesel can fuel traditional automobile engines without needing to be blended with crude oil-derived diesel, making it appealing to refiners seeking low-pollution alternatives.
According to investment bank Goldman Sachs, production of the fuel will nearly quintuple over the next three years, with feedstocks ranging from plant oils and animal fats to used cooking oil.
To comply with the USDA’s reporting confidentiality requirements, the revised soybean oil supply-and-demand forecast will combine biodiesel and renewable diesel producers’ usage.
Renewable diesel farmers use soyoil, which is currently classified as a broad category that includes food and livestock feed.