Biodiesel: Market Role, Feedstocks & Upgrade Pathways
Biodiesel remains a vital part of today’s low-carbon fuel ecosystem, providing compliance volumes and supporting rural economies even as renewable diesel and SAF scale.
Success now depends on strategic evolution — integrating diverse feedstocks like used cooking oil, tallow, brown grease, camelina, and jatropha; upgrading plant technology to handle high-FFA inputs; and building new revenue streams
With the right upgrades and partnerships, biodiesel producers can compete effectively, protect margins, and transition into modern multi-stream biorefineries built for a changing energy landscape.
Why Biodiesel Still Matters
Biodiesel has been a cornerstone of the low-carbon fuel economy for over two decades. In 2024, the United States produced approximately 1.2 billion gallons, reflecting its ongoing importance for compliance programs such as the Renewable Fuel Standard (RFS) and California’s Low Carbon Fuel Standard (LCFS).
While renewable diesel and sustainable aviation fuel (SAF) are scaling rapidly, biodiesel remains a vital part of the transition. Its established infrastructure, lower capital costs, and proven logistics network ensure it continues to play a critical role in today’s decarbonization landscape.
At Trident Renewables, our biodiesel consulting work reflects two decades of experience across feedstock strategy, plant upgrades, and market positioning.
Market Dynamics & Competition
The biodiesel industry is evolving. Historically, most facilities relied on virgin vegetable oils like soybean, corn, and canola oil. However, these feedstocks have become increasingly expensive, squeezing margins and creating headwinds for operators.
At the same time, renewable diesel competes directly for the same feedstocks while offering drop-in compatibility with existing pipelines and engines. Corporate buyers often favor renewable diesel for operational simplicity, putting further pressure on biodiesel producers.
Despite these challenges, biodiesel maintains relevance when paired with smart feedstock sourcing, vertical integration, and plant upgrades that reduce costs and expand product streams.
Feedstock Strategy to Compete
Feedstock flexibility via vertical integration strategy is the single biggest driver of competitive advantage. Operators that secure diverse, lower-cost inputs can protect margins and maintain market share.
Used Cooking Oil (UCO)
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Reliable supply with favorable carbon intensity profiles.
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Strong positioning under LCFS programs.
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Competitive pricing versus virgin oils.
Tallow & Brown Grease
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Lower-cost but higher free fatty acid (FFA) content.
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Requires advanced pretreatment to maximize yields.
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Expands operational flexibility and reduces feedstock risk.
Camelina & Jatropha
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Non-food oilseed crops with regional potential.
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Enhance sustainability profile and supply diversification.
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Useful for future-proofing against virgin oil dependency.
A balanced portfolio of feedstocks ensures resilience in volatile markets and positions plants to compete directly with renewable diesel producers.
Plant Upgrades for Yield, Cost & Flexibility
Facilities built for virgin oil processing can increase margins and reduce waste by investing in advanced pretreatment units, enabling the use of lower-cost, high-FFA feedstocks.
Degumming & Bleaching
Removes impurities and improves product quality, a necessary first step for handling alternative feedstocks like tallow and brown grease.
Esterification to Handle High Free Fatty Acids (FFA)
Converts up to 100% free fatty acids into usable biodiesel, increasing yields and minimizing waste streams.
Waste Minimization & CI Benefits
Upgrades improve overall carbon intensity scores, which directly impacts credit generation under LCFS and other compliance programs.
Plant Upgrades for Yield, Cost & Flexibility
Facilities built for virgin oil processing can increase margins and reduce waste by investing in advanced pretreatment units, enabling the use of lower-cost, high-FFA feedstocks.
Degumming & Bleaching
Removes impurities and improves product quality, a necessary first step for handling alternative feedstocks like tallow and brown grease.
Esterification to Handle High Free Fatty Acids (FFA)
Converts up to 100% free fatty acids into usable biodiesel, increasing yields and minimizing waste streams.
Waste Minimization & CI Benefits
Upgrades improve overall carbon intensity scores, which directly impacts credit generation under LCFS and other compliance programs.
Vertical Integration & New Revenue Streams
Beyond feedstock strategy, vertical integration creates additional value and revenue diversification. For biodiesel producers, this means strengthening both upstream supply and downstream product offerings, reducing exposure to margin swings while positioning for long-term competitiveness.
Refining Crude Glycerin to 99.7% Purity
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Crude glycerin is a co-product of biodiesel production.
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Refining it into USP 99.8% technical or USP grade pure glycerin opens access to higher-value pharmaceutical and industrial markets.
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Reduces waste disposal costs and strengthens overall plant economics.
Diversification into Low-CI Feedstocks and Co-products
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Cultivating non-edible oilseeds like camelina or jatropha secures a low-carbon intensity (CI) feedstock stream, unlocking higher LCFS credits and stabilizing input costs.
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Contract farming or joint ventures with growers create local supply chains while supporting rural economies.
Downstream Diversified Offtake
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On-site modular biochar units can convert agricultural residues or waste biomass into soil health products and durable carbon storage, with potential carbon removal credits.
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Bio-lubricants and specialty waxes can be produced by upgrading esters into premium, less cyclical products that smooth revenue volatility.
By capturing value at both ends — low-CI feedstocks upstream and specialty products downstream — biodiesel producers can create resilient, margin-protected integrated biorefinery (multi-stream) operations capable of thriving in a changing energy landscape.
Perspective from Experience
At Trident, our perspective is shaped by direct operational experience.
We successfully built and operated one of the first commercial biodiesel refineries in the San Francisco Bay Area, pioneering early ASTM D6751 compliant biodiesel production standards as well as witness the evolution of RIN & LCFS markets since 2006. Since then, we’ve commissioned over 15 biofuel refineries across the U.S. and Europe, transacted more than 250 million gallons, gaining deep insights into private investments, plant design, technology selection and operational strategy.
This history informs our approach today: guiding investors and operators to adapt facilities, diversify revenue streams, and thrive amidst changing market dynamics.
Stakeholder Considerations
Investors
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Assess retrofit economics and exit timing.
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Evaluate cash flow resilience under volatile RIN and LCFS credit markets.
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Plan for long-term viability within a diversified energy portfolio.
Biodiesel Producers
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Enhance feedstock flexibility by integrating lower-cost, low-CI sources such as used cooking oil, tallow, brown grease, camelina, and jatropha to protect margins and credit generation.
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Upgrade plant processes (degumming, bleaching, esterification) to increase yields, lower waste disposal costs, and improve operational efficiency.
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Diversify revenue streams through vertical integration — refining crude glycerin to 99.7%, adding modular biochar units, or producing bio-lubricants and specialty waxes to stabilize cash flows.
Government & Charter Bodies
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Shape incentives that balance innovation and continuity.
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Support rural economies and job preservation during the transition.
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Ensure sustainability criteria for feedstocks and production pathways.
Corporate Buyers
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Develop procurement strategies that align with near-term compliance needs and long-term decarbonization goals.
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Balance pricing, carbon intensity, and operational simplicity.