Ethanol constraints minor from Baltimore port closure
Ethanol flows in the US northeast may only see minor near term constraints following the closure of the Port of Baltimore due to the collapse of a bridge at the mouth of the waterway.
Producers and other market participants expect longer local transit times for trucks carrying hazardous materials — including ethanol — because of the collapse of the Francis Scott Key Bridge, which carried nearly 12.4mn cars and trucks in 2023, according to Maryland state data. This will lead to higher associated costs, but market sources say the region's supply chain flexibility, rail access and available stocks should mitigate near-term ethanol supply interruptions.
Ethanol rail deliveries into the Baltimore market are expected to increase, offsetting the loss of barge supply for the duration of the port's closure. Railroads Norfolk Southern and CSX have rail access at the Port of Baltimore.
US east coast ethanol stocks in March are at their highest monthly average since April 2020 at 8.76mn bl, according to the Energy Information Administration.
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Falling D4 RIN values alter RD strategy
Falling D4 RIN values alter RD strategy
Houston, 14 May (Argus) — Soaring US renewable diesel production is cutting renewable fuel credit prices and pressuring biofuel production margins, potentially curbing industry growth. Renewable diesel (RD) production in North America last year jumped by 36pc to a record 3.45bn USG, and output this year is expected to climb by another 28pc to 4.43bn USG, according to Argus estimates. Rising production has cut the value of biomass-based diesel D4 credits, or renewable identification numbers (RINs), by 75pc over the past year, as credit generation from renewable diesel production has outpaced the the US Environmental Protection Agency's (EPA) biofuel blending targets. D4 RINs credits reflect compliance costs of biofuel that has been blended with diesel, used by fuel suppliers in accordance with the EPA's annual Renewable Fuel Standard (RFS) mandates. They also act as an incentive for renewable fuel production, as producers can sell RINs once their biofuels are blended with conventional road fuels. Lower prices on D4 RINs generate less revenue for the biofuels industry and also reduce compliance costs for obligated parties. Some refiners have shifted their strategic focus to compensate for lower RIN values, with some cutting back on renewable fuels production. Vertex Energy plans to idle renewable diesel production at its Mobile, Alabama, facility as the company anticipates generating wider margins by returning a converted hydrocracker back to fossil fuel production. Vertex remains open to restarting its renewable diesel production if market conditions improve. CVR Energy is considering changing feedstocks to improve its renewable diesel margins, possibly substituting corn oil for soybean oil. Chevron has shared similar sentiments, saying feedstock flexibility can be a major advantage across its operations. The company recently closed two biodiesel facilities in the US midcontinent as attention shifts to more profitable renewable diesel in the long term. Valero is nearly finished converting its renewable diesel unit to sustainable aviation fuel (SAF) at its Diamond Green Diesel joint venture facility in Port Arthur, Texas. The venture with Darling Ingredients is the largest producer of renewable diesel in North America and a major contributor to the increase in supply over the past two years. Valero views the D4 RIN market as in persistent oversupply due to the growth of renewable diesel, but the company remains optimistic due to other clean fuels incentives, including state-level low carbon fuel standard (LCFS) programs that provide incentives for reducing the carbon intensity of transportation fuels. "The long-term outlook of RD is still positive, because you look at the number of LCFS programs that are still being contemplated by legislation this year," Valero executive vice president Gary Simmons said. More renewable diesel capacity is expected to come online by the end of this year. Marathon Petroleum's Martinez, California, refinery is undergoing a full conversion from conventional petroleum refining to renewable fuels and is currently running at 50pc of capacity. Phillips 66 has taken a similar approach with the conversion of their Rodeo, California, plant, with 30,000 b/d of renewable diesel online. With EPA biofuel blending targets fixed through 2025, an aggregate decrease in renewable diesel production and subsequent lower generation of D4 RINs could counter the weakened RIN prices that are contributing to the industry's depressed production margins. By Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US court upholds RFS blending targets for 2020-22
US court upholds RFS blending targets for 2020-22
Washington, 14 May (Argus) — A federal appeals court has affirmed biofuel blending requirements for 2020-22 under the Renewable Fuel Standard (RFS), rejecting lawsuits from refineries and renewable fuel producers challenging the standards. The US Environmental Protection Agency (EPA) acted within its authority in the rule when it revised the biofuel blending targets to account for small refinery exemptions it expected it would award in the future, the US Court of Appeals for the DC Circuit said today in a 2-1 ruling. The court rejected a complaint by refineries that argued EPA could only revise the annual biofuel blending targets based on exemptions it had already approved in the past. "The statute does not confine EPA to the Refiner Petitioners' preferred method of accounting for small refinery exemptions," DC Circuit judge Cornelia Pillard wrote on behalf of the majority. "EPA's choice to account for them both retrospectively and prospectively is not arbitrary or capricious." The ruling leaves intact a 2022 rule that required renewable fuel blending to increase to 20.63bn USG by 2022, up from 17.13bn USG in 2020. For the first time under the RFS, the rule used a new formula that tried to avoid a recurrent issue under which EPA failed to account for upcoming requests from small refineries for exemptions from the RFS. EPA has subsequently decided to start denying all small refinery exemptions, under a new argument that small refiners do not face a disproportionate hardship from complying with the RFS. But if the courts throw out that finding in a pending lawsuit , the formula at issue in today's court ruling could take on a greater relevance for how EPA accounts for small refinery exemptions when setting biofuel blending targets. The DC Circuit rejected a separate lawsuit by cellulosic ethanol producers that said EPA should have required increased blending of cellulosic ethanol, based in part on the availability of carryover compliance credits. The court found EPA had adequate authority to waive volumetric targets set by the US Congress in 2007 based on its finding there were inadequate domestic supplies of the fuel, which is produced from plant fibers. Judge Gregory Katsas, who dissented from the ruling, said he believed the biofuel blending requirements for 2022 were set "arbitrarily high." Katsas cited EPA's finding that those standards would impose an estimated $5.7bn in additional costs for fuel but only deliver $160mn in energy security benefits. Katsas also faulted EPA for increasing the biofuel blending targets by 250mn USG in 2022 to "cancel out a legal error" from biofuel blending targets in 2016. Katsas said there was no authority to transfer volume requirements from one year to another. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
HVO-Zulassung steht bevor
HVO-Zulassung steht bevor
Hamburg, 14 May (Argus) — Die Zulassung von HVO zum freien Verkauf an deutschen Tankstellen steht laut dem BMUV kurz bevor. Die Zahl der Tankstellen, an denen HVO bereits erhältlich ist, wächst. Eine Sprecherin des Bundesministeriums für Umwelt- und Verbraucherschutz (BMUV) bestätigte gegenüber Argus , dass die Zulassung von HVO durch die Veröffentlichung der Novelle der 10. Verordnung zur Durchführung des Bundes-Immissionsschutzgesetzes (10. BImSchV) bevorsteht. Die Novelle liegt dem Bundespräsidialamt zur Überprüfung vor, so eine Sprecherin des Amtes. Dies ist der letzte Schritt vor der Veröffentlichung im Bundesgesetzblatt. Unklar ist jedoch, ob sich die Veröffentlichung dadurch verzögern könnte, dass die Novelle des Saubere-Fahrzeuge-Beschaffungs-Gesetz zuerst veröffentlicht werden muss, was bisher noch nicht geschehen ist. Marktteilnehmer bereiten derweilen ihre Tankstelleninfrastruktur auf die Zulassung vor. Der Verein eFuelsNow e.V. verzeichnet etwa 150 Tankstellen in Deutschland, die schon HVO100 anbieten. In 2023 gab es in Deutschland laut Daten des Branchenverbands en2x etwa 14.500 Tankstellen, womit knapp 1 % aller Tankstellen bereits HVO führen. Die Tendenz ist dabei steigend; mehrere Anbieter haben bereits zusätzliche Standorte angekündigt. Der Großteil dieser Tankstellen befindet sich in Hessen, Baden-Württemberg, Bayern, Nordrhein-Westfalen und Niedersachsen. Einige Anbieter sind mittlerweile dazu übergegangen, HVO bereits vor der offiziellen Zulassung frei zu verkaufen, während andere Anbieter HVO weiterhin nur in geschlossenen Kundenkreisen über Clubs mit Zugangskarte verkaufen. Von Max Steinhau Senden Sie Kommentare und fordern Sie weitere Informationen an feedback@argusmedia.com Copyright © 2024. Argus Media group . Alle Rechte vorbehalten.
Chevron books Aframax for TMX cargo to California
Chevron books Aframax for TMX cargo to California
Houston, 13 May (Argus) — Chevron provisionally hired an Aframax to haul a cargo of crude from Vancouver, British Columbia, to the US west coast as the Trans Mountain Expansion (TMX) brings more oil to Canada's Pacific coast. Chevron put the Aframax Garibaldi Spirit on subjects for a Vancouver-US west coast voyage loading from 25 May at WS125, market participants said. That rate is equivalent to $11.16/t or $1.63/bl for heavy sour Cold Lake, according to Argus data. The US west coast historically has been the main destination for crude exported from Vancouver, with 96pc, or about 38,500 b/d, landing at ports in Washington and California in the 12 months ended 30 April, according to data from analytics firm Vortexa. Chevron purchased five cargoes from Vancouver for its 269,000 b/d refinery in El Segundo, California, during that span, most recently in February. The 590,000 b/d TMX project began commercial service on 1 May, tripling the capacity of the Trans Mountain pipeline system to 890,000 b/d. The line creates a larger link from Alberta's growing oil sands production to the west coast port of Vancouver and direct access to Pacific Rim markets, where buyers are eager for heavy sour crude . The first TMX cargo, 550,000 bl of Canadian Access Western Blend which Suncor booked on an Aframax in late April , will load between 18-24 May for June delivery in China. PetroChina and Unipec each control an Aframax near Canada's Pacific coast that would be available to load in Vancouver in the second half of May, though those ships could also be relet to deliver crude to the US west coast. The port of Vancouver's distance from many traditional Aframax trading routes may stretch the global fleet once TMX ramps up. The port cannot accommodate tankers larger than Aframaxes. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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