US RIN generation up in April as D4 climbs

  • Market: Biofuels
  • 16/05/24

Generation of renewable identification number (RIN) credits in April rose by 12pc, as biomass-based D4 diesel credits posted their second highest monthly volumes ever.

Total RIN generation rose to 2.06bn credits in April, up from 1.84bn a year earlier, the US Environmental Protection Agency reported on Thursday.

D4 credits continued to lead gains in April, with generation increasing on the year by 29pc to 780mn credits. The only month with greater D4 RIN generation was December 2023. D4 accounted for 38pc of all RINs in April, up from 33pc in April 2023.

Ethanol D6 RIN generation rose from a year earlier by 2.4pc to 1.2bn credits, accounting for 58pc of all RINs generated in the month. D6 credits were also up by 4pc from March, a month that was affected by seasonal ethanol plant maintenance.

Cellulosic biofuel D3 credit generation rose by 7.6pc from a year earlier to 69mn credits.

RINs are credits traded and produced by refiners and importers to show compliance with the EPA's Renewable Fuel Standard program. Obligated parties can produce credits when renewable fuels are blended into conventional transportation fuels or can purchase credits from other RIN producers.


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18/06/24

Phillips 66 targets high Rodeo runs

Phillips 66 targets high Rodeo runs

Houston, 18 June (Argus) — Low-carbon feedstock and sustainable aviation fuel (SAF) opportunities will support strong run rates from Phillips 66's converted renewables plant in Rodeo, California, this year, chief executive Mark Lashier said today. The outlook heralded a high output from the converted Rodeo refinery ramping up toward 50,000 b/d of renewable diesel capacity by the end of this month, despite historic lows in state and federal incentives for the fuel. "Where we are today, economically, yes, the credits are kind of compressed, but feedstocks are lower than we anticipated as well," Lashier told the JP Morgan Energy, Power & Renewables conference. "We still see good economic incentives to run and run full." The US independent refiner had started up pre-treatment units at the plant to begin processing lower-carbon feedstocks for renewable diesel in July and August, he said, consistent with previous guidance. "That's how you really make money in these assets — you get the lowest-carbon intensity feedstocks at the best value and process them through the hydrocrackers," Lashier said. " The facility would also bring online 10,000 b/d of renewable jet fuel blendstock production supporting 20,000 b/d of blended sustainable aviation fuel, a product Phillips 66 had not targeted in the initial concept for the site, he said. Both state and federal incentives to supply renewable diesel along the west coast have fallen as the fuel inundates those markets. Renewable diesel alone made up roughly 57pc of California's liquid diesel pool and generated 40pc of the Low Carbon Fuel Standard (LCFS) credits in the state's market-based transportation fuel carbon reduction program by the end of last year. The supply of lower-carbon fuels, led by renewable diesel, to the west coast LCFS markets have outstripped demand for deficit-generating petroleum fuels and led to growing reserves of available credits for compliance. California amassed more than 23mn metric tonnes of credits by the end of last year — more than enough left over after satisfying all of the new deficits generated last year to offset them a second time. The volume of unused credits has sent their price tumbling to nine-year lows. Oregon and Washington credits, which are needed for similar but distinct programs in those states, have similarly dropped as renewable diesel supplies spread out along the west coast. Gasoline consumption generates almost all new deficits in California. Year-over-year demand for the fuel nationwide has fallen below expectations this spring, Lashier said. "We are not really seeing things pick up like a lot of us expected to," he said. Lower-income customers struggling with higher costs on everything they buy may have forgone vacations, he said. The drop in broader buying power meanwhile had rippled through diesel consumption, he said. "As we move towards more expensive energy sources, that's the part of the economy that gets squeezed as well," Lashier said. "Hopefully we move through that and reverse and that part of the economy can pick up as well as the higher end of the economy." By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Amtrak used 1.2mn USG renewable diesel in 2023


18/06/24
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18/06/24

Amtrak used 1.2mn USG renewable diesel in 2023

New York, 18 June (Argus) — US passenger rail service Amtrak used 1.2mn USG of renewable diesel in fiscal year 2023, up from zero the prior year, as the company balances near-term climate targets with goals to increase ridership. Amtrak started using renewable diesel on its Capitol Corridor, San Joaquin, and Pacific Surfliner intercity passenger lines in California during the fiscal year that ended September 2023. Renewable diesel accounted for about 2pc of the company's diesel use over that period, according to a sustainability report Amtrak released this week. The rail service's petroleum diesel use rose by about 6pc year-over-year, reflecting increases in ridership as travel recovers from the coronavirus pandemic. Scope 1 emissions, which come from Amtrak's direct operations and which mostly include burning diesel fuel, were up by more than 3pc from fiscal year 2022. While Amtrak's highly traveled Northeast Corridor is electrified, most of its lines rely on diesel-fueled locomotives. The company plans to replace diesel-powered engines over the long term but says it expects to use renewable diesel as a stopgap solution in the short term and is aiming for the biofuel to become its "main fuel source" for its diesel-powered engines. While the 2022 sustainability report made passing reference to biodiesel — a separate biofuel that can be blended at smaller volumes with petroleum diesel than renewable diesel — the 2023 report only mentions efforts to scale up use of renewable diesel. Amtrak has a goal of curbing greenhouse gas emissions by 40pc from a 2010 baseline by 2030 and achieving net-zero emissions by 2045. Most renewable diesel in the US is consumed in California, which has a low-carbon fuel standard that incentivizes the use of lower-carbon fuels. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Japan’s Idemitsu, Air Water to supply B5 biodiesel


18/06/24
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18/06/24

Japan’s Idemitsu, Air Water to supply B5 biodiesel

Tokyo, 18 June (Argus) — Japanese refiner Idemitsu and industrial gas supplier Air Water plan to supply B5 biodiesel to domestic construction company Kashima for use at its construction sites in Hokkaido prefecture, starting from mid-June. Kashima will use B5 biodiesel, typically a blend of 5pc biodiesel and conventional diesel, for its construction machinery and power generators, expecting to consume up to 1,600 kiloitres/yr. Kashima is unsure how much carbon dioxide (CO2) emissions it can curb by replacing diesel with biodiesel, although B5 biodiesel can usually reduce CO2 emissions by 5pc compared with conventional diesel. Idemitsu will produce diesel at its refinery in Hokkaido, while Air Water will manufacture the biodiesel with Idemitsu's diesel by using used cooking oil collected from kitchens at Seicomart convenience stores in Hokkaido. Idemitsu will then check the quality of the B5 biodiesel and sell it to Kashima. Idemitsu aims to expand its biodiesel supplies outside Hokkaido in the future, although it declined to disclose further details. Idemitsu is attempting to build supply chains of sustainable aviation fuels, biodiesel and biomass-based petrochemical goods by 2030 as part of its decarbonisation strategy. The company delivered biofuel made from blending fatty acid methyl ester and heavy fuel oil for trial use on a vessel in Hokkaido during February-March 2023. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Q&A: Phillips 66 to balance fossil and renewable fuels


14/06/24
News
14/06/24

Q&A: Phillips 66 to balance fossil and renewable fuels

Houston, 14 June (Argus) — With Phillips 66's Rodeo, California, refinery expected to ramp up to over 50,000 b/d of renewable fuels production by the end of this quarter, all eyes are on the refiner for what is next. Zhanna Golodryga , executive vice president of emerging energy and sustainability for Phillips 66, talked to Argus at the refiner's Houston headquarters about how the company looks at investments, its focus on sustainable aviation fuel (SAF) production and why Texas might be the Silicon Valley of the energy transition. The conversation has been edited for clarity and length. When Rodeo reaches full capacity, it will represent about 3pc of your overall output. What will your fleet look like longer-term and what will be the renewables/petroleum split? Not all the refineries in our portfolio are created equal, and when we look at them what I call them is "lower-carbon energy hubs". Not low, lower, because it's going to be a combination of everything. We're looking at the assets we have in the portfolio and what we can do to help bring in lower carbon solutions and what can we build out. Our focus is going to continue to be SAF. We understand the limitations of feedstocks and we have a very strong commercial organization that is now working on providing feedstocks just for Rodeo. But we're also thinking about what we can do to bring in different feedstocks. Energy transition opportunities aren't going to replace our traditional fossil fuel refining. It's an "and", not an "or". You've highlighted a future focus on SAF. Does that mean a move away from renewable diesel (RD)? I think we have flexibility to do both and it will be market driven going forward. We have to look at demand but there is demand for SAF globally, not just in the US. Demand for gasoline is not as strong as demand for diesel and sustainable aviation fuel. That is what our focus is and then we want to diversify the feedstock. What is your outlook for RD? I think RD is here for quite some time. It's hard to predict what's going to happen by 2050 but I think we will have the demand. It's going to take a long time to electrify all future transportation. I think we have a much better opportunity for now to focus on what we're really good at. That's fuels, renewable fuels. You have faced activist investor pressure calling for Phillips 66 to focus on its core refining business. How do investors feel about the Rodeo conversion and your future plans? We have taken a pragmatic approach to the energy transition. We have criteria that we follow prior to taking any projects over the line, specifically the energy transition type projects. They must meet five key prerequisites: the right returns, the right technology that has been proven at scale, the right regulatory environment, preferably involve a partnership and be done at the right time. We have to prove with Rodeo that this is, as I call it, our license to continue to grow the business. This is our license to operate additional energy transition business. This one is going to be done extremely well. What are the policy tailwinds and headwinds to your renewables investments? When we look at our opportunities in our energy transition portfolio, we are building our economic model for them to produce the right returns without any incentives. That is our starting point. On the other hand, the IRA [US Inflation Reduction Act] has been a bipartisan initiative and we think it's going to stand for the greater good of the planet. We have to think globally, as we have the Humber refinery in the UK. It's interesting for us to see what's possible in the US with the IRA incentives, versus more of a stick in Europe. But the challenge for us is permitting and timing. We probably could have brought Rodeo online sooner if we didn't have to wait for some permits. Our headquarters are in Texas and Texas is the "energy transition Silicon Valley". I'm repeating someone's words and those are the words of Bill Gates. But I believe that. We're perfectly positioned on the Gulf coast to go to the next phase and build something here. You've mentioned Phillips 66's 265,000 b/d Sweeny refinery in Old Ocean, Texas, as a low carbon energy hub. Does that mean it is a candidate for renewable fuel conversion or co-processing? It could be an option, maybe not at Sweeny, but in the Gulf coast, maybe Lake Charles. It's driven by our hardware, just like what we've done at Rodeo. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Low-CO2 biofuel feedstock imports to rise: USDA


13/06/24
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13/06/24

Low-CO2 biofuel feedstock imports to rise: USDA

New York, 13 June (Argus) — A new US tax credit kicking off next year that is more generous for fuels that produce fewer greenhouse gas emissions will likely spur more imports of low-carbon feedstocks, the US Department of Agriculture (USDA) said in a report this week. A raft of government incentives, including the federal renewable fuel standard and low-carbon fuel standards (LCFS) in states like California, has already spurred a boom in renewable diesel production, upping demand for feedstocks that can be used to make the fuel. The US was a net soybean oil importer for the first time ever in 2023 because of strong demand from domestic refineries, and the value of US imports of animal fats and vegetable oils more than doubled from 2020 to 2023 according to the report. That trend could become even more pronounced next year as the Inflation Reduction Act's 45Z tax credit, which offers up to $1.75/USG for sustainable aviation fuel and up to $1/USG for other fuels like renewable diesel, comes into force. The credit can only be claimed for fuel produced in the US, likely cutting biofuel imports and sending more feedstocks that would have been refined abroad to the US instead, the report says. The 45Z credit will also be more generous to fuels with lower carbon intensity, upping demand for waste feedstocks like used cooking oil that already fetch greater discounts in LCFS programs. Fast-rising imports of China-origin used cooking oil have already frustrated some agricultural groups, which lose out if there are more ample supplies of waste feedstocks. The report says that while soybean oil was the "crucial feedstock" allowing for the recent growth in US renewable diesel, its share of the feedstock mix has been trending downwards because of competition from lower-carbon feedstocks and lower-cost canola oil from Canada. While soybean oil exports have plunged because of the renewable diesel boom, they could recover slightly if refineries increasingly turning to waste feedstocks cuts into US soybean oil's current premium over global vegetable oils. The report adds that soybean oil's role in renewable diesel production is also at risk from rising supplies of soybean meal, which is produced alongside oil at crush plants and where the global demand picture is less clear. "Based on global demand for soybean meal, soybean oil cannot continue to fuel renewable diesel production growth at current rates during the next few years without major changes to global soybean meal demand, shifts in exporter market shares, or lower supplies in other exporting countries," the report says. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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