EMA Journal • Fall 2024 • The Hopeful Future of Biofuels and E-Fuels

Reducing lifecycle carbon intensity of fuels has gained significant attention in recent years due to changing environmental regulations and pressure interest from supply chain partners. These factors are helping drive urgency for companies to implement lower lifecycle carbon solutions.

Producers of lower carbon intensity fuels, like Chevron Renewable Energy Group, are responding to this urgency by providing solutions that comply with current regulations and support companies’ targets and operations.

Biofuels can be a great option for companies to take smaller steps toward lowering lifecycle carbon intensity today. Some of the benefits of using biofuels include product availability, compatibility with most existing infrastructure and potential incentives that can help companies adopt lower carbon solutions without typically changing their operations.

It’s important for companies to understand the value of an incremental approach to implementing lower carbon intensity fuels within their business. Taking smaller steps now toward lower lifecycle carbon emissions may be a more accessible tactic than executing substantial changes all at once in the next five to 10 years.

The U.S. Environmental Protection Agency (EPA) created the EPA Center for Corporate Climate Leadership to help companies better understand the roadmap to a lower carbon intensity future. For those just starting out, the agency places an emphasis measuring — and then addressing — Scope 1 emissions first, which are emissions a company has direct control over.

When discussing reduction of lifecycle carbon emissions, it’s key for companies to recognize why and how they may benefit from getting started today. By leveraging the benefits of incremental implementation, they can position themselves as more responsive supply chain partners — all while continuing their operations.

Helping businesses understand the benefits of a greater number of available lower carbon fuels and how to use these solutions is important. Biomass-based diesel, for example, can be used with virtually any existing equipment and can even be mixed with ultra-low sulfur diesel (ULSD) in the same tank.

This convenience helps to alleviate concerns around cost and equipment, as it allows users to try different biodiesel blend levels without making a large financial commitment or equipment changes.

Companies may also gain confidence by knowing that the availability of biodiesel has increased over the past several years, and this momentum is expected to continue. This growth is supported by programs such as the federal Higher Blends Infrastructure Incentive Program (HBIIP), passed in 2021, which continues to fund infrastructure development to bring higher blends of biodiesel to the pump.

With the expanding accessibility and use of high-quality alternative fuels, companies have options. As of July 2024, 1,289 biodiesel stations and 602 renewable diesel stations have opened since 2020. For biodiesel, the number of new fueling stations has increased by 297 percent since 2022.¹

As federal and local regulators aim to reduce heavy-duty truck engine emission standards by 2027, they are also focusing on financial incentives. When companies identify and use these incentives, the savings from switching to alternative fuels, such as biodiesel, can increase due to greater access and availability of the fuels and, in some cases, ongoing tax benefits.

These financial incentives help provide an underutilized opportunity for companies to adopt lower carbon intensity solutions typically without modifying their operations. Additionally, businesses that embrace alternative fuels early may find more programs available to them than those that wait until adoption is more widespread. The U.S. Department of Energy outlines both laws and incentives on a state-by-state basis for carriers interested in utilizing state-level incentive programs. Federal incentives are also available to all U.S. companies.

Today, there are more options available than ever before, which is good news because it will take all of these solutions to lower lifecycle carbon emissions.

Here are some benefits of key lower carbon fuel solutions to help you find a balanced and scalable approach that can be customized to your business needs.

Biodiesel is a drop-in fuel that can be used in most existing diesel vehicles and fueling infrastructure. This provides diesel fleets with an immediate solution to lower lifecycle carbon emissions and that is compatible with existing equipment.

Compared with petroleum diesel, biodiesel fuel can also help enhance performance with higher Cetane, added lubricity and a lower carbon burn, generating fewer particulates and putting less stress on diesel particulate filters.

Renewable diesel is a newer alternative fuel that has quickly gained popularity. It effectively reduces carbon intensity, delivers strong performance and contains up to 85 percent less sulfur than ULSD.

Renewable diesel blends well with high-quality biodiesel and blending the two fuels capture the best properties of each: high Cetane for better combustion, increased lubricity, lower emissions and an excellent cloud point.

Renewable natural gas (RNG) is produced through anaerobic digestion of manure, food, and municipal and solid waste. It is sourced from dairy farms, waste treatment facilities and landfills. What would normally decompose, producing methane emissions that are 30 times more potent than CO2, is instead processed into a carbon-negative fuel and delivered to vehicles at RNG/CNG fueling stations.

Compressed natural gas (CNG) is methane that is stored and transported under high pressure in its gaseous state. Compared to conventional diesel, CNG has advantages:

• Lower carbon intensity due to reduced emissions across its production life cycle

Light-duty, hydrogen-powered fuel-cell electric vehicles (FCEVs) are growing in popularity. Fleets seeking to lower their carbon intensity can benefit from hydrogen fuel, which can also attract new customers in both light- and heavy-duty fleet sectors. Hydrogen is a lower carbon intensity fuel that can enhance your value proposition in the commercial sector.

Lowering lifecycle carbon emissions is more than a trend; it’s a crucial step in a competitive landscape where customers aim to reduce their carbon intensity targets and meet societal demands. Reducing fossil carbon emissions is a relatively easy first step toward a lower carbon intensity fleet and one of the most impactful and timely moves your business can make.

by Jason Lawrence, Senior Business Development, Team Lead Fuel Sales, Chevron, EMA Executive Committee Council Corporate Partner