Phillips 66 boosting Rodeo renewable diesel: Correction

Corrects attribution in final paragraph.

Phillips 66 expects to hit full rate renewable diesel production of 8,000 b/d from a converted unit in California in the third quarter.

The US independent refiner today confirmed starting up a hydrotreater converted to renewable diesel production earlier this month at the Rodeo plant of its 120,000 b/d San Francisco refining complex.

The refiner plans a separate, full site conversion to halt crude processing and generate 52,000 b/d of renewable diesel production in early 2024. Phillips 66 plans to file environmental and engineering documents to local permitting authorities before October, the company said today on a quarterly earnings call.

"We feel really good about our time line," executive vice president of refining Bob Herman said. "We continue to optimize our schedule and look for opportunities to pull construction forward and get the unit up as soon as possible."

Phillips 66 currently runs soybean oil treated off site, but continues plans for treatment equipment at Rodeo to broaden its slate of feedstocks. The refiner plans to run lower-carbon feedstocks including used cooking oil and fats, in addition to vegetable oils. Phillips 66 will leverage existing storage and trading operations to supply used cooking oil to its 230,000 b/d Humbert refinery in Killingholme, England, from offices and tanks in London, China and Singapore.

"We are moving used cooking oil all around the world, optimizing that business, and we will do the same with other feedstocks as time goes on," executive vice president for marketing and commercial Brian Mandell said.

Project design includes about 5,000 b/d of sustainable aviation fuel production. Up to 10,000 b/d of Rodeo's output could include sustainable aviation fuels (SAF), with additional investment. But unlike renewable diesel, SAF lacks a clear return on such spending, the refiner said. The fuel generates fewer federal blending credits, called renewable identification numbers (RINs), compared to renewable diesel, and has as a byproduct renewable naphtha, a lower-value product.

"To get there, there needs to be a pathway all the way to the jet," Herman said. "There needs to be a price signal to pull it out of the distillate pool and into the sustainable aviation pool."

By Elliott Blackburn