Calumet reports 2Q loss, hopeful for RD margin recovery

: Biofuels
24/08/09

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.

By Nathan Risser

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25/06/24

Netherlands publishes RED III biofuels draft

London, 24 June (Argus) — The Dutch government's updated draft legislation to transpose the EU's revised Renewable Energy Directive (RED III) notably proposes abolishing double-counting renewable energy contributions from Annex IX feedstocks. The draft introduces a greenhouse gas (GHG) emission reduction mandate for land, inland shipping and maritime shipping, but excludes aviation — which was included in a previous draft . The RED III mandate will take effect in 2026. Obligated parties have to fulfil the mandate by surrendering a sufficient amount of so-called emission reduction units (EREs) in each sector. The mandate's flexible credit allowance allows EREs generated in the land sector to be used to partly meet emission reduction obligations in inland and maritime shipping ( see table ), but EREs from inland and maritime shipping cannot be used by land sector suppliers to fulfil their compliance requirements. Fuel suppliers with overall consumption of more than 500,000 l/yr will need to incorporate a 14.4pc share of renewable fuels in their annual deliveries in 2026. This increases linearly, to reach 27.1pc in 2030. The amount of crop-based biofuels in the land sector will be limited to 1.4pc of the overall energy content of total consumption until 2030, and will not be accepted towards targets in maritime and inland shipping and aviation. The amount of Annex IX Part B biofuels — such as used cooking oil (UCO) and animal fats categories 1 and 2 — that can be counted towards the mandate will be limited to 4.29pc in the land sector and 11.07pc in inland shipping. Obligated parties will be unable to claim EREs from Annex IX Part B fuels used in maritime shipping. The draft also introduces a minimum share of emission reductions that have to be achieved by Annex IX Part A and renewable fuels of non-biological origin (RFNBO), for all sectors. RED III mandates that 5.5pc of all fuels supplied must be advanced biofuels, including at least 1pc RFNBOs by 2030. The Netherlands' draft decouples these targets, to reduce investment uncertainty ( see table ). Refineries that use renewable hydrogen in their production process can claim refinery reduction units — or RAREs — which can be used by a supplier to meet an RFNBO sub-target in various sectors. Correction factor delay The ministry will delay its plans to apply a "correction factor" of 0.4 to its "refinery route" stimulus for hydrogen demand, in order to ensure the measure does not undermine direct use of hydrogen in transport. The correction factor means the value of emissions reductions credits generated through the use of renewable hydrogen for transport fuel production would be limited to a certain percentage of those generated through direct use of renewable hydrogen or derivatives in transport. The government leaves the option open to impose a correction factor from 2030. Although the EU Fuel Quality Directive increases the maximum share of bio-based components to 10pc in diesel, the Dutch government said fuel suppliers must continue to offer B7 — diesel with up to 7pc biodiesel — as a protection grade, because of the large number of cars incompatible with B10. Companies will be able to carry forward any excess EREs to the next compliance year. Companies with an annual obligation can carry forward up to 10pc of the total amount of EREs needed to fulfil their obligation in a year, with registering companies allowed to carry forward 4pc. Dutch renewable fuel tickets (HBEs) carried into 2026 will be converted into EREs on 1 April 2026, the government said. By Evelina Lungu and Anna Prokhorova Overview of future Dutch obligations pc CO2 2026 2027 2028 2029 2030 Land (Road) Sector-Specific Obligation 14.4 16.4 22.8 24.8 27.1 Flexible Credit Allowance 0.0 0.0 0.0 0.0 0.0 Total Obligation 14.4 16.4 22.8 24.8 27.1 Annex 9A Sub-Obligation 3.1 4.5 5.9 7.3 8.8 RFNBO Sub-Obligation 0.1 0.1 0.4 0.8 1.1 Conventional Biofuel Limit 1.2 1.2 1.2 1.2 1.2 Annex 9B Limit 4.3 4.3 4.3 4.3 4.3 Maritime Sector-Specific Obligation 3 3 4 5 6 Flexible Credit Allowance 1 2 2 2 3 Total Obligation 4 5 6 7 8 Annex 9A Sub-Obligation - - - - - RFNBO Sub-Obligation 0 0 0 0 0 Conventional Biofuel Limit 0 0 0 0 0 Annex 9B Limit 0 0 0 0 0 Inland Waterways Sector-Specific Obligation 3 4 6 8 12 Flexible Credit Allowance 1 1 2 2 3 Total Obligation 4 5 8 10 15 Annex 9A Sub-Obligation - - - - - RFNBO Sub-Obligation 0 0 0 0 0 Conventional Biofuel Limit 0 0 0 0 0 Annex 9B Limit 11 11 11 11 11 The Ministry of Infrastructure and Water Management *RFNBO: Renewable fuel of non-biological origin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

GS Caltex explores new Pome treatment in Indonesia

25/06/24

GS Caltex explores new Pome treatment in Indonesia

Singapore, 24 June (Argus) — South Korean refiner and petrochemical producer GS Caltex has launched a six-month feasibility study into a new technology to reduce methane emissions from palm oil mill effluent (Pome) treatment in Indonesia, the world's largest producer and exporter of palm oil. The project will evaluate the potential for an evaporative concentration treatment facility, which GS Caltex estimates will cut methane emissions from Pome treatment by 120,000 t/yr of CO2 equivalent, while also recycling the Pome. South Korea's economy and finance ministry and Export-Import Bank will back the project. Pome is a liquid byproduct of palm oil milling. The oil fraction of this effluent is used as a feedstock in production of biofuels such as sustainable aviation fuel. Pome is typically stored in open-air anaerobic ponds at the palm oil mill, where the effluent is left to anaerobically digest for several weeks, releasing significant amounts of methane. Some palm oil producers cover the ponds to collect the methane, which can then be used for electricity generation. GS Caltex's proposed facility would treat the Pome immediately after generation to prevent decomposition and enable greater methane reduction. If implemented, this would be the first such facility in Indonesia. The company will make a decision on financing and logistics after the feasibility study. This project is part of a government initiative that provides financial support for companies' overseas greenhouse gas reduction projects. By Haridas Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ontario weighs domestic biomass-based diesel quota

25/06/23

Ontario weighs domestic biomass-based diesel quota

New York, 23 June (Argus) — Ontario is considering requiring that domestically produced renewable fuels make up 3pc of the province's diesel pool, an effort to help biodiesel producers struggling to adapt to policy changes in the US. Ontario late last week requested input on a proposal to supplement existing provincial biofuel blend requirements with a new mandate for Canadian production, similar to a domestic content rule that took force in British Columbia this year. Ontario already requires that renewables like biodiesel and renewable diesel make up 4pc of diesel consumption each year, but this proposal would require that three-fourths of that mandated volume come from biofuels produced in Canada. The Ontario Ministry of the Environment, Conservation and Parks says the proposal is in response to a new clean fuel tax credit that took effect in the US this year, which can only be claimed by US producers. A US Department of Agriculture report late last year said that there were six remaining operational biodiesel plants in Canada and that the industry has historically sent almost all its fuel into the US, which up until this year treated foreign biodiesel as eligible for a federal tax credit. At the same time, US biofuels have increasingly entered Canada to meet demand from low-carbon fuel standards federally and in British Columbia. In those programs, higher-carbon fuels that exceed annual carbon intensity limits incur deficits that suppliers must offset with credits generated from approved lower-carbon alternatives. The Canadian biofuel industry has pushed officials to respond. British Columbia as a result began requiring this year that renewables make up a minimum 8pc of diesel fuels supplied in the province, up from 4pc, and that this mandated volume must come from Canadian producers starting in April. British Columbia-based renewable diesel producer Tidewater Renewables has also unsuccessfully pushed Canada to impose duties on US product. The Ontario environment ministry said the domestic mandate, if finalized, would be a "temporary, time-limited measure" that would last as long as US subsidies "threaten Ontario's biodiesel industry." The new US tax credit that excludes foreign refiners is currently set to lapse after 2027, but Republican lawmakers have floated using a massive budget bill they want to pass in the coming weeks to extend the incentive through 2031. While full regulatory text is not available, as is typical for this early stage of the Ontario rulemaking process, it appears the proposal would otherwise keep intact the general structure of the province's biofuel mandate. The program offers more credit to lower-carbon fuels, which led to a slightly lower than 4pc biofuel blend rate for the diesel pool in 2023, according to a report from trade group Advanced Biofuels Canada. The domestic content proposal would also not affect a separate mandate that biofuels make up increasing amounts of the gasoline pool through 2030. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Raft of issues impacting Spanish biodiesel industry

25/06/23

Raft of issues impacting Spanish biodiesel industry

Barcelona, 23 June (Argus) — Fraud, uncertainty, competition from hydrotreated vegetable oil (HVO), changes to US biofuel regulations, technical issues and stubbornly weak margins are combining to negatively impact the Spanish biodiesel industry. Spanish producers continue to complain about weak margins, with widespread talk of low production levels and units halting completely. These sentiments have continued all this year. Some uncertainty over the EU's sustainability verification process, and its accreditation body the ISCC are also mentioned by companies. One producer said "everyone is waiting, for the ISCC to take action to remove certificates." Some of these certificates concern imports of feedstock such as used cooking oil (UCO) but also cargoes of HVO from the Asia-Pacific region. Competition between biodiesel and HVO for blending into diesel is not new, has previously been the subject of ire in France and appears likely to remain problematic in Spain. Fraud cases in excess of €500mn ($576mn) from 2023 remain outstanding, the end to the US' blenders tax credit — which has halted exports to the US — and operational issues with Spain's SICBIOS accounting system, are not helping the industry. The energy ministry this month extended the application for provisional tickets for the first half of the year to 31 August, as "technical issues with the system have prevented the correct functioning of the SICBIOS software." Spanish biodiesel imports have increased this year, pushing the country to being a net importer, which is rare. According to customs data, imports rose by 45pc on the year to 270,000t in January-April. The main increases came from the Netherlands, now Spain's largest supplier, which provided 105,000t, up from 70,000t on the year. Malaysia, Italy, Belgium and Malta all boosted supplies, shipping 25,000-40,000t. Cargoes labelled as Maltese are unusual and not supported by Argus tracking or Kpler data. Exports continued to drop sharply — to 190,000t in January-April, lower by 67pc year on year and a 10-year low for the period (see chart) . Spain has long acted as a distribution hub for imports from outside the EU, re-exporting cargoes to regional buyers, but these have all but halted. Exports of over 50,000t in April were the third lowest for any month since November 2017 — only January and March this year were lower. Such low exports are in line with apparent weak production — assessed by Argus using import, export, demand and stocks data. This fell by 53pc on the year to 435,000t in the first four months of this year. By Adam Porter Spanish biodiesel exports 000t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

TotalEnergies, Avril look into cover crops for SAF

25/06/23

TotalEnergies, Avril look into cover crops for SAF

London, 23 June (Argus) — TotalEnergies and biofuel producer Avril have agreed to "examine the development" of intermediate crops in France. Oil production from intermediate crops is projected at 10,000t by 2028, to rise to as much as 30,000t by 2030, the companies told Argus . This is based on Avril's summer 2024 camelina trials, which the firm said "yielded encouraging results". The trials are being carried out across France in 2025 to identify the best growing areas. The companies will consider the use of crops that qualify for SAF production under EU regulation , which defines intermediate crops as those that maintain soil's organic matter content, do not require additional land use, or compete with food or feed production. Byproducts of some intermediate crops can be used in sectors including animal feed. Sustainable aviation fuel (SAF) is to be produced from the oil in TotalEnergies' French biorefineries, and co-processed in its refineries in France and elsewhere in Europe. Cover crop development in the EU has been prompted in part by the bloc's renewable energy policy push. The EU's ReFuelEU Aviation legislation mandates a minimum 2pc SAF blend in 2025, to increase to 70pc by 2050. By Megan Evans and Toby Shay Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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