US Petroleum Refiners Discuss Biofuel Projects, Markets in Q3 Financials

by Ron Kotrba (Biobased Diesel Daily) Amid significant drops or losses in income for the third quarter of 2024, three U.S. petroleum refiners who also manufacture renewable diesel provided newsworthy updates on their biofuel operations and market outlooks in recent quarterly financial releases and conference calls.

The company’s renewable diesel segment, which consists of the Diamond Green Diesel joint venture with Darling Ingredients, reported $35 million of operating income for the third quarter compared to $123 million for the third quarter of 2023, nearly a 72 percent drop.

The sustainable aviation fuel (SAF) project at the Diamond Green Diesel plant in Port Arthur, Texas, was completed in October.

The SAF project is expected to be fully operational this year, providing the plant with the optionality to upgrade approximately 50 percent of its current 470-million-gallon renewable diesel annual production capacity to SAF.

At its fully converted biorefinery in Rodeo, California, Phillips 66 produced 44,000 barrels of biofuels per day in the third quarter.

The company acknowledged the higher premium for SAF and, while Phillips 66 has already successfully produced SAF at the Rodeo complex, it will not be producing renewable jet fuel in the fourth quarter.

Instead, the company is running through higher carbon-intensity feedstock in anticipation of the federal clean fuel production credit (45Z) taking effect in January, even though the U.S. treasury department and IRS have yet to issue any real guidance on the incentive.

Mandell said he thinks renewable diesel margins, which have been slim, will improve going into the fourth quarter and beyond.

For the third quarter, CVR Energy processed approximately 20 million gallons of vegetable-oil feedstocks through the renewable diesel unit in Wynnewood, Oklahoma.

Lamp noted that the HOBO spread weakened slightly from the second quarter of 2024 with lower diesel prices, although this was offset by higher prices for D4 RINs and LCFS credits, which helped drive a positive result for the quarter.“We are pleased with the third-quarter results from the Wynnewood renewable diesel unit with this being the first full quarter of operations with the RD unit with a pretreater,” Lamp said, adding that discussions with interested counterparties related to the potential conversion of the renewable diesel unit in Wynnewood to 100 percent SAF are ongoing.

When asked about the possibility of the Wynnewood hydrocracker being put back into conventional petroleum service, Lamp said, “It goes back to the discussion of how short we are on RINs. And even with a small-refinery waiver for Wynnewood, we’re still substantially short on RINs. What the hydrocracker does in renewable diesel service is provide us with relatively low-cost RINs ... And I think that’s a strategy we’re going to continue to play out. This quarter, we did make money in renewable diesel, and I think with the setup we have and with the pretreater now, we’re experiencing good yields. Our biggest issue really is catalyst life, and we continue to explore that.”