Increasing adoption of renewable diesel in ports

3) Regional supply volatility. Imbalanced clean fuel markets can concentrate production and adoption in certain regions. In Washington, for example, due to the program only being in effect for 3 years, clean fuel credit prices have not been as competitive as those in longer-standing programs in Oregon and California, incentivizing producers to ship renewable diesel south rather than serve the local market. The Washington Legislature has since tightened the program under HB 1409 to make credit prices more competitive in the coming years. 

Strategies to accelerate renewable diesel adoption

Overcoming these barriers requires coordinated action across the port ecosystem. The following strategies offer a practical path forward for port authorities, fleet operators, and regional stakeholders.

1) Aggregate demand across port end users

A single fleet operator switching to renewable diesel may not generate enough volume to justify a reliable supply chain. But a port is a concentrated demand center, with harbor vessels, cargo handling equipment, drayage trucks, and rail locomotives all burning diesel within the same geographic footprint.

By coordinating across these end users, port authorities can aggregate demand and structure a sizable and bankable offtake agreement – a contractual commitment to purchase a set volume of fuel over a defined period. Offtake agreements send the demand signals that producers and distributors need to justify allocating supply to a new region.

For instance, a pilot program coordinated by a trusted non-profit or port authority could convene all fuel consumers at a given port, or even across multiple ports in the same region, to negotiate a single offtake agreement with a regional distributor. This reduces per-unit transportation costs, provides the volume certainty producers need, and creates a replicable template for other ports.

2) Advocate for supportive policies at the state and national level

At the state level, Clean Fuel Standards are one of the most powerful policy mechanisms for driving renewable diesel adoption. By creating a market-based mechanism that rewards low-carbon fuels, CFS policies help close the price gap between renewable and petroleum fuels. In more mature clean fuels markets, these policies have made renewable diesel cheaper than fossil diesel. In California, for example, renewable diesel has cost an average of 10 cents less per gallon over the past 8 years and makes up over 70% of all diesel sold in the state.

Coalition building can also address the practical infrastructure gaps that limit supply. In some states, expanding renewable diesel supply may require additional tankage at fuel terminals, which in turn may require local governments to revise permitting caps on petroleum storage assets. This kind of regulatory coordination is where coalitions become essential.

At the federal level, stakeholders can advocate for amendments to the Renewable Fuel Standard (RFS). Under the current standard, ocean-going vessels using renewable diesel cannot generate renewable identification numbers (RINs), preventing them from capturing the financial benefits of the program. This creates a substantial price differential between waterfront and road use of the same fuel. Advocating for legislative changes that extend RFS eligibility to maritime would help drive price parity with road transportation users.  

3) Enlist original equipment manufacturers as educators

The most credible messenger for an end user uncertain about switching fuels is the company that built the engine. Original equipment manufacturers (OEMs), the makers of tugboat engines, cargo cranes, drayage trucks, and locomotives, can address skepticism in ways that policy briefs and marketing materials cannot.

For example, a port authority could partner with major OEMs to develop a targeted education campaign for port fleet operators, combining warranty documentation, maintenance cost data, and testimonials from ports that have already adopted renewable diesel. These communications should emphasize the transition as a cost-reduction strategy and not just a sustainability play by quantifying maintenance savings and emphasizing that engine warranties are honored when using renewable diesel.