RENEWABLE DIESEL & SAF ROUNDUP

U.S. renewable diesel capacity continues to rapidly expand and is poised to surpass operating biodiesel capacity, according to data released by the U.S. Energy Information Administration on Sept. 30. Biodiesel capacity fell to 2.089 billion gallons in July, down 126 MMgy when compared to the 2.215 billion gallons of capacity reported for June and down 342 MMgy when compared to the 2.431 billion gallons of capacity in place as of July 2021. Capacity for renewable diesel and associated fuels, including renewable heating oil, renewable jet fuel, renewable naphtha, renewable gasoline and other biofuels and biointermediates, expanded to 2.089 billion gallons in July, up 142 MMgy when compared to the previous month. Capacity for renewable diesel more than doubled when compared to the 1.014 billion gallons of capacity in place as of July 2021.

CoBank in late September published a report that recognizes renewable diesel as the most exciting growth opportunity in the U.S. biofuels space, with proposed capacity increasing from approximately 1 billion gallons in 2021 to 6.5 billion gallons by 2030. That level of capacity would equate to approximately 15% of today’s diesel market, according to the report. CoBank notes that it expects the recently signed Inflation Reduction Act of 2022 to a be a catalyst for biofuels sector growth over the next decade. Provisions of the law that are particularly beneficial to the biofuels industry include $500 million allocated to support biofuel infrastructure development; the extension of the $1 per gallon tax credit for biomass-based diesel through 2024; the newly established clean fuel production tax credit and enhanced carbon capture and storage credits/payments; and a temporary tax credit for sustainable aviation fuel (SAF).

Mitsui Chemicals Inc. announced an investment in Apeiron AgroCommodities Pte. Ltd., rebranded and known as Apeiron Bioenergy. Apeiron Bioenergy is one of the largest collectors and sellers of used cooking oil in Southeast Asia and China region. Mitsui Chemicals indicated the investment will help the company expand its procurement of biomass raw materials as it looks to meet growing demand for biobased chemicals and plastics.

Earlier this year, Neste Corp. and Marathon Petroleum Corp. announced an agreement to establish a 50/50 joint venture to produce renewable diesel following a conversion project of Marathon’s refinery in Martinez, California. The companies recently reported that the required closing conditions have been met, including the receipt of the necessary permits and regulatory approvals, and Neste and Marathon have closed the transaction for the establishment of the joint venture. To be called Martinez Renewables, the operation is slated to commence production in early 2023. The facility is expected to be capable of producing 2.1 million tons per year (730 MMgy) by the end of 2023.

OMV, an international integrated oil, gas and chemicals company headquartered in Vienna, Austria, has signed a Memorandum of Understanding to supply SAF at Ryanair airports across Austria, Germany and Romania. The MOU agreement gives Ryanair unique access to purchase up to 160,000 tons (53 million gallons) of SAF from OMV over the next 8 years, starting in 2023.

Clean Fuels Alliance America has appointed Jonathan Martin of Ottawa Hills, Ohio, as its first director of economic and market analytics. Martin, most recently an economist with Marathon Petroleum Co., brings 10 years of experience in oil and gas corporate economics to this newly created role. Martin has a bachelor’s degree in chemical engineering from Rose-Hulman Institute of Technology, Terre Haute, Indiana. He will be based in Ohio.

Imperial on Sept. 6 announced a long-term contract with Air Products to supply low-carbon hydrogen for Imperial’s proposed renewable diesel complex at its Strathcona refinery near Edmonton, Alberta. Air Products will provide pipeline supply from its hydrogen plant under construction in Edmonton. Announced in August 2021, Imperial’s renewable diesel complex is expected to produce more than 1 billion liters per year of renewable diesel from locally sourced feedstocks.

PHOTO: VERTEX ENERGY

Vertex Energy Inc., a specialty refiner and marketer of high-quality refined products, provided an update on the company’s Mobile, Alabama, refinery renewable diesel conversion project, including a strategic extension of the planned construction timeline. As previously disclosed, Vertex is working on completing a $90 million-plus capital project designed to modify the Mobile Refinery’s existing hydrocracking unit to produce renewable diesel fuel on a standalone basis. Upon completion of the conversion project, the refinery is expected to commence production of approximately 8,000 to 10,000 barrels per day (bpd) of renewable diesel, with production volumes anticipated to ramp up to approximately 14,000 bpd. After a thorough review of project execution risk by the company, mechanical completion of the conversion project has been proactively extended from its initial target of year-end 2022, to the first quarter of 2023. These risk considerations are the result of recent COVID-19 induced product delays and global supply chain shortages in several previously unimpacted markets, including common pipes, valves and fittings, and certain base bulk materials, according to the company. Management expects mechanical completion to occur in the first quarter of 2023, with production anticipated to begin in the second quarter.