Persistent volatility drives consistent uncertainty for renewable diesel and biodiesel producers. With increased regulatory action and production growth on the horizon, alongside mounting geopolitical tensions, stakeholders need a weekly insight into their operational costs and returns.
What happened?
US renewable diesel (RD) margins were mixed amid Nymex volatility to the downside and mostly stronger feedstock prices.
Biodiesel margins lost ground as the soybean oil to heating oil (BOHO) spread widened. CBOT soybean oil (SBO) gains were met by weaker Nymex ULSD futures.
Bleached Fancy Tallow (BFT) remained the highest returning feedstock last week, while used cooking oil (UCO) prices corrected higher.
D4 RINs posted marginal losses across vintages on average. The RIN market has been steadily drifting lower since February.
The California Low Carbon Fuel Standard (LCFS) market pressed higher. The forward curve developed a more pronounced contango.
PBF and ENI announced a 50/50 joint venture, St. Bernard Renewables LLC, to run a new RD plant in Chalmette, Louisiana. The 360mn gallons/yr facility is expected to come online during the first half of 2023 and will include full pretreatment allowing the consumption of 1.1mn t/yr of feedstock.
Vertex expects to complete its 10,000 Bbl/d Mobile, Alabama renewable diesel facility by the end of this month, with production set for the second quarter. Vertex aims to boost capacity to 14,000 b/d in late 2023, an expansion originally planned for 2024.
Tidewater Renewables Ltd. expects to begin operations at its 45mn gallons/yr Prince George Refinery in British Columbia, Canada by Q2. The plant will ramp up to 80% nameplate capacity by the second half of 2023.
FutureFuel Corp. is considering halting biodiesel production citing rising feedstock prices, uncertainty on the permanency of certain federal tax credits and heavy competition from the renewable diesel industry. The company owns a multifeed, 59mn gallons/yr biodiesel plant in Batesville, Arkansas.
The UK received its first renewable diesel import on March 30 to Valero Cardiff following a decision to lift import tariffs on US RD. The move presages growing export opportunities for competitive US RD product.
