Farm Progress
Biodiesel and renewable diesel meet more than 6% of the nation's need for diesel fuel. A new study released by Clean Fuels Alliance America demonstrates that the production of biodiesel and renewable diesel consistently reduces fuel prices by increasing the supply.
The demand for diesel fuel is very inelastic, meaning that even small changes in fuel supply will result in relatively larger changes in prices. Therefore, by adding biodiesel options to the market space, it is increasing the supply and driving down the price of #2 diesel.