Exclusive-Exxon, Chevron Look to Make Renewable Fuels without Costly Refinery Upgrades -sources

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August 12, 2021

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by Laura Sanicola (Reuters) … The companies (Exxon and Chevron) are looking into how to process bio-based feedstocks like vegetable oils and partially-processed biofuels with petroleum distillates to make renewable diesel, sustainable aviation fuel (SAF) and renewable gasoline, without meaningfully increasing capital spending.

Commercial production of renewable fuels is costlier than making conventional motor gasoline unless coupled with tax credits.

A task force was created at Exxon’s request within international standards and testing organization ASTM International to determine the capability of refiners to co-process up to 50% of certain types of bio-feedstocks to produce SAF, according to the sources.

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“Our goal is to co-process biofeedstocks in the FCC (fluid catalytic crackers) by the end of 2021,” a Chevron spokesperson told Reuters, to supply renewable products to consumers in Southern California.

The company is partnering with the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB) to develop a path to produce fuel that would qualify for emissions credits.

A source familiar with the matter said if approved by the EPA and CARB, Chevron would be able to produce and generate credits for renewable gasoline. That product is not yet commercially available, but can reduce carbon dioxide emissions by 61% to 83%, depending which feedstock is used, according to the California Energy Commission.

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Congress is considering legislation for tax credits that would further spur refiners to process sustainable aviation fuel commercially.

Some refiners, like San Antonio-based Valero Energy Corp and Finland-based Neste , have ramped up production of renewable fuels from waste oils and vegetable oils to cash in on lucrative federal and state financial incentives. Several U.S. refiners are in the midst of partially or totally converting plants to produce certain renewable fuels, particularly diesel.

If approved, new methods of producing renewable fuels at refineries could allow refiners to avoid lengthy environmental permitting processes. Many of these processes are still undergoing further testing to see which can make renewable fuels commercially, but without damaging refining units. READ MORE

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