The largest renewable diesel (RD) producer in Canada is weighing whether to idle its 18,000 b/d biorefinery before the end of the year, citing poor margins and uncertainty about US biofuels policy.
Braya Renewable Fuels — which began commercial operations in February at a former petroleum refinery in Come-by-Chance, Newfoundland and Labrador — said any potential shutdown would be temporary to see if market conditions improve. The company had previously planned to increase capacity to 35,000 b/d and to also produce sustainable aviation fuel.
"Braya plans to retain its permanent workforce if a temporary economic shutdown is required" and "all equipment would be maintained in good condition and in a ready to start mode", refinery manager Paul Burton said.
Other Canadian biorefineries have criticized what they see as an unlevel playing field between US and Canadian producers, since ample supply of US-produced renewable diesel has arrived in Canada this year and helped crash prices of federal and British Columbia clean fuel credits. Economics for Canadian biofuel producers could worsen in January when a US tax credit for blenders of biomass-based diesel expires and is replaced by an incentive that can exclusively be claimed by US producers, likely deterring foreign fuel imports.
Braya has seen "lower-than-normal margins" recently and "short-term market disruptions" from the looming expiration of that blenders credit, Burton said.
A proposal to extend the blenders credit for another year faces long odds in Congress' lame duck session, energy lobbyists have said.
Braya has exported more than 2.1mn bl of renewable diesel into the US this year, largely into California, bills of lading indicate. An additional vessel with an estimated 345,000 bl of renewable diesel was scheduled to reach Long Beach, California, last weekend according to data from trade and analytics platforms Kpler, reflecting foreign producers' incentive to rush biofuel into the US before the end of the year.
Braya has also criticized policy shifts in California, where regulators recently updated the state low-carbon fuel standard to eventually limit credit generating opportunities for fuels made from soybean and canola oil. In August comments to California regulators, Braya said that it had "entered into tens of millions of dollars of soybean oil feedstock contracts for 2025" and that soybean oil at the time represented "well in excess" of 20pc of its feedstock mix.
