As U.S. fleets navigate policy uncertainty and evolving emissions mandates, one technology is gaining traction across public and private operators alike—renewable diesel (RD). According to the State of Sustainable Fleets 2025 Market Brief, RD is emerging as a practical, low-disruption pathway to reduce greenhouse gas (GHG) emissions without costly infrastructure upgrades or vehicle overhauls.
Surging Fleet Adoption
The report reveals that 39% of fleets surveyed in 2024 are now using renewable diesel—a 12% increase since 2022. While biodiesel (BD) uptake has plateaued at 29%, RD continues to rise sharply. Unlike BD, which is typically used in blends up to 20%, RD can fully replace conventional diesel (up to 99%) without compromising engine performance or warranties. This “drop-in” compatibility is proving attractive to fleet managers seeking emissions reductions without operational risk.
Public utilities and government fleets are leading the charge, with RD powering 21% and 18% of their vehicles, respectively. Private sector adoption is also accelerating, particularly in logistics and refuse fleets where operational uptime and emissions profiles are closely scrutinised.
Real-World Benefits Backed by Operators
Beyond emissions, RD users report notable maintenance advantages. According to the brief, fleets using RD experience lower rates of diesel particulate filter (DPF) replacement and fewer emissions system faults—translating to estimated savings of up to $0.02 per mile. As one fleet manager from San Jose puts it: “It has been a game changer for us… better performance leading to lower maintenance and operating costs.”
In New York City, the entire municipal heavy-duty fleet of 12,500 vehicles transitioned to RD99 in late 2024. King County in Washington began adopting RD as a bridge solution while waiting for zero-emission trucks to become more viable. New Brunswick, New Jersey, became the state’s first local government to adopt RD across all diesel vehicles and equipment.
California Leads, Other States Follow
In California—the vanguard of low-emission fuels—RD and BD replaced 70% of conventional diesel in transport during the first three quarters of 2024. Saia Trucking, a major early adopter of alternative fuels, is piloting RD at multiple California locations, while RD consumption in the state rose 23% year-on-year.
Importantly, RD’s footprint is no longer limited to the West Coast. Distribution is expanding rapidly. RD is now available in Connecticut, New Jersey, and several Southeastern states thanks to partnerships involving major producers like Neste and Colonial Oil. The East Coast alone now holds nearly 10% of total U.S. RD inventories.
Growing Supply Meets Rising Demand
RD production in the U.S. rose 28% in the first half of 2024 compared to the same period in 2023, reaching 1.51 billion gallons by June. The U.S. Energy Information Administration (EIA) projects daily production to increase to over 7.2 million gallons in 2025.
Producers are repurposing or expanding existing refineries to meet demand. Chevron’s El Segundo refinery now produces diesel from either renewable feedstocks or crude oil, while Valero’s new facility in Texas is capable of producing 360,000 barrels per day of renewable distillate. RD production is also expanding through vertically integrated operations involving waste haulers and energy providers.
Incentives in Flux
Despite its strong market performance, renewable diesel faces uncertainty on the policy front. The popular $1.00/gallon Blender’s Tax Credit expired at the end of 2024. Its intended replacement—the 45Z tax credit—sets stricter emissions thresholds. To qualify, RD producers must achieve a carbon intensity (CI) score of 47.4 gCO₂e/MJ or lower. Fuels with negative CI scores (e.g., derived from animal fats or used cooking oil) may earn higher credits—up to $1.50/gallon when combined with prevailing wage and apprenticeship requirements.
However, the report notes that 45Z will not fully replace the value of the Blender’s Credit for most producers, especially those using higher-CI feedstocks. This uncertainty, along with shifting tax code provisions, could impact future investment decisions.
West Coast Carbon Markets Still Critical
California’s Low Carbon Fuel Standard (LCFS) remains a vital driver of RD economics. In late 2024, California updated LCFS rules to tighten sustainability criteria. A new 20% cap on virgin crop-based feedstocks (e.g. soy and canola) aims to reduce land-use impact. Meanwhile, fuels with ultra-low or negative CI continue to benefit from strong credit generation.
LCFS prices dipped to nine-year lows mid-2024 but have since rebounded above $70 per metric ton, restoring some market confidence. Oregon and Washington—both with LCFS programs—are aligning more closely with California’s rules, reinforcing a regional corridor for low-carbon fuels.
Why Renewable Diesel Matters
The strength of RD lies in its ability to deliver immediate climate benefits without overhauling fleet assets or waiting on new infrastructure. For fleets not yet ready to fully transition to electric or hydrogen vehicles, RD offers a credible and cost-effective decarbonisation tool.
As the report states:
“Renewable fuels were once viewed as a threat to conventional fuel producers, but today they present opportunities to meet growing demand while competing with other low-GHG fuel and technology options.”
From reducing tailpipe NOx and particulate emissions to enabling cleaner operations in legacy fleets, RD is now a serious contender in the U.S. energy mix. And as its availability expands and policy mechanisms evolve, its role in sustainable transport is likely to grow—both within North America and beyond.
For local stakeholders and fleet operators watching the U.S. transition, renewable diesel offers an important case study in scalable decarbonisation that bridges today’s needs with tomorrow’s goals.
