Calumet reports 2Q loss, hopeful for RD margin recovery
US specialty refiner Calumet reported a second quarter loss as debt costs outweighed a slim operating profit, but the company said it expects wider renewable fuels margins.
Calumet reported a loss of $39mn in the second quarter compared to a loss of $22mn in the same three months of 2023 as interest expenses on its debt more than offset an 11pc increase in sales revenue and an operating profit of $6.2mn in the most recent quarter.
The company reported positive operational results with its Montana Renewables plant and specialty products business — which makes lubricants, fuels and asphalt — both running at record throughputs in the second quarter.
The Montana Renewables refinery in Great Falls produced 23,000 b/d of fuels including 12,000 b/d of renewables, up from a total 19,000 b/d and 7,00 b/d of renewables in the second quarter of last year. Calumet's overall business processed 86,000 b/d of feedstocks in the quarter, up from 74,000 b/d in the same period last year.
Renewable fuels producers have faced narrowing profits this year, but Calumet thinks there are multiple factors supporting a recovery in renewable diesel (RD) profits, which it makes at its Great Falls refinery.
Declining agricultural feedstocks costs, lower renewable fuel imports, shuttered biofuels plants and existing plants focusing on sustainable aviation fuel (SAF) are some of the "positive catalysts" coming for RD margins, chief executive Todd Borgmann said on an earnings call Friday.
There are also positive demand factors largely coming from legislative support such as additional states opting in to the low carbon fuels standard and increased renewable volume obligations, Borgmann said.
Borgmann said the company is optimistic that the EPA will correct Renewable Volume Obligations, "rather than forcing additional capacity to close and delay the energy transition. It's hard to predict exactly how these will play out in the very near-term, especially during an election season."
Calumet is undergoing discussions with the US Department of Energy for a loan that will help finance an expansion of its SAF production, making it clear on today's earnings call that the company does not intend to progress with the project without a government loan. The company produced just under 2,000 b/d of SAF in the second quarter.
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East-west marine biodiesel spread near six-month low
East-west marine biodiesel spread near six-month low
London, 6 September (Argus) — The east-west marine biodiesel spread narrowed amid firm demand for the B24 blend in Singapore and lacklustre spot marine biodiesel demand in northwest Europe in recent sessions. The east-west marine biodiesel spread — the premium held by B30 used cooking oil methyl ester (Ucome) dob ARA to B24 Ucome dob Singapore — was marked at $47.50/t on 5 September, its narrowest since 19 March. The spread narrowed amid a noted increase in demand from Asian-based shipowners who embark on voyages to Europe ahead of the implementation of FuelEU Maritime regulations in Europe next year — according to market participants. The latter had also reported an increase in B24 demand in Singapore from containerships seeking scope 3 emissions rights that can then be passed on to cargo owners. Scope 3 emissions rights can be obtained on a mass-balance system, allowing shipowners flexibility with regards to the port at which a blend can be bunkered. Argus assessed B24 dob Singapore prices at an average of $720.70/t on 1 July–5 September this year, compared with $757.70/t on 8 February–28 June following the launch of the B30 Ucome dob ARA price on 8 February. Consequently, the east-west marine biodiesel spread was marked at an average of $95.34/t on 1 July–5 September, compared with $74.57/t on 8 February–28 June. A wider east-west spread would incentivise shipowners to opt for the B24 blend in Singapore rather than ARA, when operationally viable, to meet the voluntary scope 3 demand from their customers. Rising demand in the Singapore bunkering hub was further supplemented by higher sales of marine biodiesel blends at the port. According to official data released by the Maritime and Port Authority of Singapore, sales of marine biodiesel blends in the second quarter of the year were marked at about 161,400t — higher by 34,500t from the previous quarter. This was also higher by 52,600t from the second quarter of last year. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Idemitsu completes biofuel trial for bunkering vessels
Idemitsu completes biofuel trial for bunkering vessels
Tokyo, 5 September (Argus) — Japanese refiner Idemitsu has completed a test of mixed biofuel using fatty acid methyl ester (Fame) for bunkering vessels in the Hokkaido area ahead of commercial use. Idemitsu carried out a trial for 10 months starting in September 2023, using a 24pc Fame mixture of used cooking oil collected from convenience stores in Hokkaido with existing marine fuel oil. The mixed biofuel can be used in the same applications as existing marine fuel oil without any changes to equipment specifications or operating conditions in cold climates, Idemitsu said. Mixed biofuel is able to cut 20pc of carbon dioxide compared with existing marine fuel oil. But there has been difficulty in using it in sub-zero temperatures, which results in solidification and oxidation. Idemitsu will increase use of the bio-mixed marine fuel to areas other than Hokkaido, in its effort to achieve the country's 2050 decarbonisation goal. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Gold Standard releases two new shipping methodologies
Gold Standard releases two new shipping methodologies
London, 4 September (Argus) — Carbon registry Gold Standard has launched its Methodology for Reducing Methane Emissions from Combustion Engine Exhaust and its Methodology for Marine Fuels and Bio Bunkers, aimed at reducing the environmental impact of shipping operations. The two new methodologies will add to Gold Standard's existing Retrofit Energy Efficiency Measures in Shipping methodology and Methodology for Emission Reduction by Shore-side or Offshore Electricity Supply System. The Methodology for Marine Fuels and Bio Bunkers was developed by biofuels trading firm Alcom, and will serve as a guideline for obtaining carbon credits from the use of marine biodiesel blends. The methodology currently only applies to marine biodiesel blends comprising used cooking oil methyl ester (Ucome), with a scope covering biofuel production to be used within the maritime industry across all sea vessel types and covering the entire chain of emissions on a well-to-wake basis. Only the biofuel component that has been loaded on to the vessel and blended with fossil fuels can be eligible for carbon credits under this methodology. Gold Standard's Methodology for Reducing Methane Emissions from Combustion Engine Exhaust was developed in partnership with consulting group Fremco and technology company Daphne Technology. The methodology aims to reduce methane emissions stemming from maritime and stationary land-based internal combustion engines that utilise natural gas or other methane-rich fuels. It will also mandate real-time measurements before and after the abatement system to ensure "robust monitoring of emission reductions". By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
SE Asia could supply 12pc of global SAF by 2050: Report
SE Asia could supply 12pc of global SAF by 2050: Report
London, 4 September (Argus) — Southeast Asia could have the capability to supply around 12pc of global demand for sustainable aviation fuel (SAF) by 2050, according to a report by not-for-profit association the Roundtable on Sustainable Biomaterials (RSB). This would be equivalent to 45.7mn t out of an estimated 380mn t, based on the Air Transport Action Group's forecast for how much SAF will be needed to meet net-zero targets in 2050. The RSB expects rice husks and straw to provide 36.9pc of feedstocks for SAF production in southeast Asia, followed by palm oil residues at 11.8pc. Around three-quarters of potential SAF feedstock can be sourced from post-consumer and agricultural waste, including cassava (9.3pc), sugarcane bagasse (6.4pc) and municipal solid waste (8.6pc), the RSB said. The report expects Indonesia, Thailand, Vietnam, Malaysia and the Philippines together to account for about 90pc of the region's SAF supply in 2050. All five, except Vietnam , participate in CORSIA , a scheme that obligates members to buy SAF or buy offset credits to offset their emissions. The RSB assessed feedstocks on availability and sustainability, using 12 social and environmental criteria including the region's "significant risk" of deforestation and water stress. SAF accounted for just 0.2pc of global commercial aviation fuel use in 2023, but demand is poised to rise sharply on the back of upcoming blending mandates worldwide, particularly the EU's ReFuelEU mandate under which fuel suppliers will need to blend at least 2pc SAF in their jet fuel deliveries next year. Some 43 international airlines are committed to using 13mn t/yr of SAF by 2030 to meet their regulatory and voluntary targets, and demand for SAF from the corporate sector has increased through book and claim approaches . Unblended SAF, which is completely free of fossil fuels, could reduce the aviation sector's emissions by 84pc over the fuel's lifecycle, according to the RSB. Policies aligning Regional policies in southeast Asia are beginning to reflect global trends, with several countries adopting or exploring SAF mandates, said RSB. Indonesia and Malaysia, with their established biofuel industries, have "laid the groundwork" for SAF production, "leveraging their abundant agricultural resources" such as palm oil, while Thailand and the Philippines have initiated policy frameworks and pilot projects to explore SAF potential, although commercial production is "still nascent", the report said. Singapore "stands out" with its comprehensive approach to SAF, the RSB said. The report highlights Singapore's National Sustainable Air Hub Blueprint launched in February 2024, which outlines a strategy to achieve net zero domestic and international aviation emissions by 2050. The blueprint also includes the introduction of a SAF levy for flights departing from Singapore in 2026. By Madeleine Jenkins Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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