Advanced BioFuels USA

by Ron Kotrba (Biobased Diesel Daily) CVR Energy is waiting to complete its hydrocracker conversion for renewable diesel production in Wynnewood, Oklahoma, due to high feedstock prices, CEO David Lamp said in a second-quarter conference call on the company’s earnings. The company had originally announced the project would be complete in July and ready to produce up to 100 million gallons of renewable diesel per year from soybean oil.

“Construction on the Wynnewood renewable diesel unit is progressing as planned, and we’ve reached the point where we’re ready to bring the hydrocracker down [to perform the conversion],” Lamp said. “However, renewable diesel feedstock prices have increased considerably, particularly for refined, bleached and deodorized (RBD) soybean oil, to the level where economically it does not make sense to complete the conversion at this time.” Lamp said he believes recent renewable diesel plant start-ups, such as the Phillips 66 Rodeo Renewed facility near San Francisco, have contributed to the most recent feedstock price spikes.

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As more renewable diesel plants are built, Lamp said he expects feedstock demand to increase and that suppliers will price them according to California Low Carbon Fuel Standard credit values and freight economics. He also said he believes some renewable diesel producers’ feedstock contracts will soon be expiring, which will force them “to give up the margins they currently enjoy.”

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He said if a renewable diesel producer had a pretreatment unit, they could handle the cheaper unrefined soybean or other oils. “But crush plants are making a fortune on [RBD] right now, and many of them are not offering untreated [bean oil].”

Lamp said all feedstocks will eventually trade on prices relative to their carbon intensity (CI) scores.

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Although the Wynnewood conversion project is on hold, Lamp said the Wynnewood’s pretreatment unit, the design process for which should take three months, is still moving forward. This would allow the site to convert lower-quality, lower-cost and higher CI feedstocks into renewable diesel.

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As far as company’s plans to do a similar hydrocracker conversion at its Coffeyville, Kansas, refinery, Lamp said the initial engineering will be done “but we will not sanction the project until we see how feedstocks work out.”

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… one of several “fixes” to RFS Lamp offered—one that he said he believes is “the best long-term solution”—is EPA “should act now to reduce the ethanol mandate and increase the renewable diesel and biodiesel mandate.”

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He said all emphasis in the RFS should be on cellulosic (D3) and biobased diesel (D4) RINs, not ethanol (D6).  READ MORE

Renewable Fuel Companies Edge Out Some Refiners on Feedstock (Reuters/U.S. News and World Report)