Economists at the University of Illinois and USDA’s Economic Research Service are rolling back their estimates of potential growth in the renewable diesel fuel industry, reflecting lower-than-expected demand for the biofuel.

They now project production capacity will reach 5.2 billion gallons of renewable diesel in 2025, down from the previous 6-billion-gallon forecast for 2025 less than two years ago. Production this year is estimated at 5.1 billion gallons, up from 4.3 billion in 2023.

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The economists say the demand levels determined by the renewable volume obligations in the federal Renewable Fuel Standard have effectively limited production capacity at 5 billion gallons.

“The list of announced projects is still long and could eventually add substantially to renewable diesel capacity.  However, none of these projects have yet broken ground and started construction,” the economists write in their analysis.