Trends Watch: Diesel to Continue Climb in 2017

By Jon Scharingson, Renewable Energy Group Inc.

You don’t need me to tell you that 2017 comes with uncertainty for people in the fuel business as we wait to see how federal policies shake out.

But talk to Allen Schaeffer, executive director of the nonprofit Diesel Technology Forum, and you come away confident that diesel fuel will continue its upward trend in the U.S. with individual drivers and fleets.

“We’re in a good position with diesel technology because it is truly clean, well-established and proven, we’re seeing increased efficiency with diesel vehicles, and it helps create energy independence and improves our economic security,” Schaeffer said.

2016 highlights

He shared several positive developments from 2016, including:

  • Diesel car and pickup truck sales were on track to exceed the combined sales of plug-in hybrids and electric vehicles in 2016. And the diesel “take rate” for passenger cars, trucks and SUVs nearly doubled between January and December, disproving the dire predictions during the Volkswagen scandal.
  • Light-duty pickup trucks and SUVs accounted for more than 63% of sales in 2016, and those categories have among the most popular diesel models.
  • More fleets were converting to biofuels.
  • Increased penetration of new-technology diesel engines — both in cars and light trucks. For example, 37% p of all commercial trucks on the road are 2007 model year and newer.

“That 37% figure is a good indication to us that fleets and others are liking what they see and are investing in diesel engines and technology,” Schaeffer said.

Bright future for diesel, advanced biofuels

As for 2017, automakers are introducing more diesel models to the booming SUV and light-duty pickup truck market. Ford and GMC, for instance, announced new diesel options to popular models — the F-150 and Terrain, respectively — at the North American International Auto Show in January.

Schaeffer is also optimistic about the future of biodiesel, in part because it’s tied to the diesel engine. Also last month, at the National Biodiesel Conference, General Motors announced it was expanding its portfolio of vehicles that can run on a B20 blend (20% biodiesel, 80% petroleum diesel) to include cars and crossovers.

Schaeffer doesn’t see anything stopping the sustainability trend that is growing in importance among individual drivers as well as local governments and companies.

“They have it baked into their mentality now,” he said.

What I will add is that biodiesel is an even cleaner-burning option. In fact, the California Air Resources Board has given biodiesel the lowest carbon intensity score among liquid fuels. I’ve spoken with many c-store operators who are adding diesel and biodiesel to diversify their fuel offerings and to attract drivers and fleets eager for increased efficiency and lower emissions.

Also, as I’ve written in this space before, there are economic reasons for c-stores to add biodiesel.

For more information about biodiesel and REG, visit regi.com.

Jon Scharingson oversees the sales and marketing efforts for Renewable Energy Group Inc., a leading biodiesel producer.

 

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