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Released June 22, 2023 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--The Environmental Protection Agency (EPA) has announced increased volume quota requirements for biodiesel and renewable fuel from 2023 to 2025 through the Renewable Fuel Standard (RFS) program, amid ongoing investment in related U.S. production plants. Industrial Info is tracking $63.3 billion worth of capital-spending projects to produce renewable fuels in the U.S, including biodiesel, of which nearly $27 billion have a medium-to-high probability (70-99%) of moving forward as planned.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for a full list of detailed project reports.
The four renewable fuel categories under the RFS program are nested within each other:
Two clean-fuel trade groups criticized the EPA's final rule. In a statement, the Clean Fuels Alliance America (Clean Fuels) (Jefferson City, Missouri) expressed "extreme disappointment" with the final regulations, even though there were moderate increases in biomass-based diesel volumes.
Kurt Kovarik, vice president of federal affairs with Clean Fuels, said: "U.S. clean fuel producers, oilseed processors, fuel distributors and marketers have all made significant investments to grow the industry rapidly over the next several years. The industry responded to signals from the Biden administration and Congress aiming to rapidly decarbonize U.S. fuel markets, particularly aviation, marine, and heavy-duty transport, and make clean fuels available to more consumers. The volumes EPA finalized today are not high enough to support those goals."
The EPA also is limiting the amount of ethanol that can be used to reach those renewable fuel quotas, with an amount of 15 billion gallons for 2024 and 2025--which is down from the EPA's originally proposed volumes of 15.25 billion gallons for both years. The Renewable Fuels Association (St. Louis Missouri and Washington, D.C.) knocked this, saying the reduction is "inexplicable and unwarranted."
Renewable diesel and biodiesel, two major renewable fuels, are refined from the same types of fat, oil and grease feedstocks. But renewable diesel burns cleaner and can be used in engines that were designed to use petroleum diesel, as it has the same chemical structure, which makes production more efficient than biodiesel. Renewable diesel also fares better in cold weather and can be transported via pipelines.
The U.S. Energy Information Administration's (EIA) June Short-Term Energy Outlook forecasts U.S. production of biodiesel and renewable diesel to increase by more than 800 million gallons in 2023 and 900 million gallons in 2024. But the recently announced final rule increases RFS volumes for these fuels by only 590 million gallons over the three-year period: 60 million gallons in 2023, 220 million gallons in 2024, and 310 million gallons in 2025.
Two of the top three U.S. refiners by capacity, Marathon Petroleum Corporation (NYSE:MPC) (Findlay, Ohio) and Phillips 66 (NYSE:PSX) (Houston, Texas), have jumped on the renewable fuel bandwagon and have completed, or are at work on, projects at idled traditional refineries or brownfield sites.
Marathon shuttered its Martinez Refinery near San Francisco, California, in 2020 following COVID-induced drop in demand for refined products, with plans to convert the facility into a combined oil terminal and renewable diesel plant via the three-phase, $1.2 billion Martinez Renewable Fuels Project. Marathon recently completed the project's $550 million Phase 1 conversion, and the facility reached its full initial capacity of 260 million gallons per year from various feedstocks. Marathon is at work on the $700 million phases II and III, which would bring the facility's full annual capacity to 730 million gallons. Completion is expected by the end of the year. The project is a 50:50 joint venture with Neste Corporation (Espoo, Finland). Subscribers to the GMI Alternative Fuel Project Database can click here to read related project reports.
Meanwhile, Phillips 66 is at work on its $600 million Rodeo Renewed project near San Francisco, California, which will convert the Rodeo Refinery to produce more than 800 million gallons per year of renewable diesel, renewable gasoline and sustainable aviation fuel (SAF), upon completion expected in early 2024. According to the company website, Phillips 66 plans to distribute its renewable diesel "through new and existing channels, including approximately 600 branded retail sites in California." Subscribers can click here for the project report. The company is evaluating an expansion that would expand SAF production.
But aside from the refining majors, several smaller, independent U.S. companies are getting in on the action as well. Strategic Biofuels (Columbia, Louisiana) expects to begin construction of its $700 million Louisiana Green Fuels (LGF) Renewable Diesel Project in September. The plant, which is located at the active Port of Columbia, would process forestry waste feedstocks to produce 33 million gallons per year of renewable fuels--consisting of 29 million gallons per year of renewable diesel (88%) and 4 million gallons per year of renewable naphtha. According to the Strategic Biofuels website, the plant is expected to be operational in late 2025 or early 2026.
Subscribers can click here for a list of all project reports cited in this article, and click here for related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for a full list of detailed project reports.
The four renewable fuel categories under the RFS program are nested within each other:
- Cellulosic biofuel (example feedstock: wood chips, biogas)
- Biomass-based diesel (BBD), which is "biodiesel-equivalent," according to the EPA, and typically made from soybean or canola oil
- Advanced biodiesel, which encompasses cellulosic and biodiesel and can be produced from biomass, excluding corn starch
- Total renewable fuel (also noted by the EPA as conventional fuel), which the EPA typically refers to as ethanol derived from corn starch
Two clean-fuel trade groups criticized the EPA's final rule. In a statement, the Clean Fuels Alliance America (Clean Fuels) (Jefferson City, Missouri) expressed "extreme disappointment" with the final regulations, even though there were moderate increases in biomass-based diesel volumes.
Kurt Kovarik, vice president of federal affairs with Clean Fuels, said: "U.S. clean fuel producers, oilseed processors, fuel distributors and marketers have all made significant investments to grow the industry rapidly over the next several years. The industry responded to signals from the Biden administration and Congress aiming to rapidly decarbonize U.S. fuel markets, particularly aviation, marine, and heavy-duty transport, and make clean fuels available to more consumers. The volumes EPA finalized today are not high enough to support those goals."
The EPA also is limiting the amount of ethanol that can be used to reach those renewable fuel quotas, with an amount of 15 billion gallons for 2024 and 2025--which is down from the EPA's originally proposed volumes of 15.25 billion gallons for both years. The Renewable Fuels Association (St. Louis Missouri and Washington, D.C.) knocked this, saying the reduction is "inexplicable and unwarranted."
Renewable diesel and biodiesel, two major renewable fuels, are refined from the same types of fat, oil and grease feedstocks. But renewable diesel burns cleaner and can be used in engines that were designed to use petroleum diesel, as it has the same chemical structure, which makes production more efficient than biodiesel. Renewable diesel also fares better in cold weather and can be transported via pipelines.
The U.S. Energy Information Administration's (EIA) June Short-Term Energy Outlook forecasts U.S. production of biodiesel and renewable diesel to increase by more than 800 million gallons in 2023 and 900 million gallons in 2024. But the recently announced final rule increases RFS volumes for these fuels by only 590 million gallons over the three-year period: 60 million gallons in 2023, 220 million gallons in 2024, and 310 million gallons in 2025.
Two of the top three U.S. refiners by capacity, Marathon Petroleum Corporation (NYSE:MPC) (Findlay, Ohio) and Phillips 66 (NYSE:PSX) (Houston, Texas), have jumped on the renewable fuel bandwagon and have completed, or are at work on, projects at idled traditional refineries or brownfield sites.
Marathon shuttered its Martinez Refinery near San Francisco, California, in 2020 following COVID-induced drop in demand for refined products, with plans to convert the facility into a combined oil terminal and renewable diesel plant via the three-phase, $1.2 billion Martinez Renewable Fuels Project. Marathon recently completed the project's $550 million Phase 1 conversion, and the facility reached its full initial capacity of 260 million gallons per year from various feedstocks. Marathon is at work on the $700 million phases II and III, which would bring the facility's full annual capacity to 730 million gallons. Completion is expected by the end of the year. The project is a 50:50 joint venture with Neste Corporation (Espoo, Finland). Subscribers to the GMI Alternative Fuel Project Database can click here to read related project reports.
Meanwhile, Phillips 66 is at work on its $600 million Rodeo Renewed project near San Francisco, California, which will convert the Rodeo Refinery to produce more than 800 million gallons per year of renewable diesel, renewable gasoline and sustainable aviation fuel (SAF), upon completion expected in early 2024. According to the company website, Phillips 66 plans to distribute its renewable diesel "through new and existing channels, including approximately 600 branded retail sites in California." Subscribers can click here for the project report. The company is evaluating an expansion that would expand SAF production.
But aside from the refining majors, several smaller, independent U.S. companies are getting in on the action as well. Strategic Biofuels (Columbia, Louisiana) expects to begin construction of its $700 million Louisiana Green Fuels (LGF) Renewable Diesel Project in September. The plant, which is located at the active Port of Columbia, would process forestry waste feedstocks to produce 33 million gallons per year of renewable fuels--consisting of 29 million gallons per year of renewable diesel (88%) and 4 million gallons per year of renewable naphtha. According to the Strategic Biofuels website, the plant is expected to be operational in late 2025 or early 2026.
Subscribers can click here for a list of all project reports cited in this article, and click here for related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
