Viewpoint: Canadian refiner shifts to biofuels in 2022

Newfoundland and Labrador's Braya Renewable Fuels — formerly the Come-By-Chance refinery — will move to capture rising demand of sustainable aviation fuel (SAF) and renewable diesel as it reinvents itself from a boutique gasoline producer.

The refinery was formerly one of the few facilities outside of California capable of producing the boutique blend of in-state gasoline known as CARBOB. Despite the three-week voyage from east coast Canada, barrels made the journey to California amid demand spikes that revolved around turnaround seasons as well as unplanned setbacks.

The draw of producing CARBOB lays in the unique and stringent emission standards mandated by the California Air Resources Board, and the resulting higher prices of the unique in-state grade of gasoline.

When California refineries go offline either for routine maintenance or an unplanned infrastructure setback, regional supply drops, typically leaving local producers jostling to find barrels to take advantage of higher prices as well a meet their own marketing needs.

But when the Come-By-Chance refinery was idled in April 2020 at the start of the Covid-19 pandemic, tumbling fuel demand had made gasoline flows from Canada's east coast to the US west coast unappealing.

More than a year and a half later, new owners Silverpeak expect to complete conversion of existing units to produce an estimated 14,000 b/d of renewable diesel and SAF only by mid-2022.

The renamed Braya renewables facility plans to initially supply customers in its home province of Newfoundland and Labrador, although rising global demand for lower carbon fuels could expand production and supply routes.

Existing incentive programs such as California's Low Carbon Fuel Standard (LCFS) provide a powerful draw for renewable producers and help set a declining ceiling for carbon intensity for transportation fuels. The facility's location would also allow it to take advantage of the pending Canadian Clean Fuel Standard, expected to roll out in 2023.

Democrats in the US Congress have proposed in their Build Back Better spending bill a $1.25/USG tax credit for SAF that reduces emissions by at least 50pc compared with conventional jet fuel. Recent challenges to the plan made by a biofuels-advocacy group called for co-processing and non-biomass processing facilities to be excluded.

Braya, as a stand-alone renewables facility, should be excluded from such objections, providing further leverage for expansion. The facility also plans to eventually add the ability to produce green hydrogen through wind and solar power.

By Craig Ross