The United States is seeing a shift in the use of biodiesel, with an increasing trend of its utilization in residential, commercial, and electric power sectors, beyond its traditional use in the transportation sector. According to the U.S. Energy Information Administration (EIA), in 2023, around 5% of the total 46 million barrels of biodiesel consumed in the country was used in non-transportation sectors, a significant increase from the 1% recorded a decade prior.
A major portion of this growth is attributed to the heating oil market, with biodiesel being blended with heating oil to provide a more sustainable heating solution for homes and businesses. The EIA estimates that the combined residential and commercial sectors consumed nearly 5% of the total U.S. biodiesel in 2023. New York, Connecticut, and Rhode Island have led the way in implementing biofuel blending mandates for heating oil, with New York being the largest non-transportation consumer of biodiesel, accounting for 57% of the total.
Biodiesel is also being used in electricity generation, although to a much lesser extent, with Hawaii being the largest consumer of biodiesel for electricity generation. The use of biodiesel in residential, commercial, and electric power sectors highlights its potential to contribute to decarbonization efforts across various sectors of the U.S. economy. The blending mandates in the Northeast states serve as a model for how policy can drive the adoption of renewable fuels in heating applications, and the niche uses in power generation demonstrate biodiesel’s versatility. As states continue to explore strategies for reducing their carbon footprint, the role of biodiesel in residential, commercial, and electric power sectors may see further expansion.