Refinery Conversions to Double US Biofuels Output

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Renewable diesel and sustainable aviation fuel (SAF) plants are proliferating in North America, with the conversions of existing oil refineries alone adding a considerable amount of incremental volumes.

An overview from Energy Intelligence finds that since the start of 2020, some eight refineries have announced conversions to produce renewable fuels. By 2025, alongside expansions at Valero’s Diamond Green Diesel (DGD) plant, these facilities could displace an incremental 238,000 barrels per day of fuel — mostly diesel — assuming all come into service.

That anticipated growth is more than double the US' current biofuels output. At the start of the year, domestic renewable diesel and other biofuel plant capacity was just under 1.8 billion gallons per year, or just 114,000 b/d, according to the Energy Information Administration (EIA).

Refinery Conversions in North America
(million gallons/yr)       
CompanyProjectLocationAs of Q2'22H2'2220232024Total
HFCNavajo RD UnitNew Mexico--125----125
MPCDickinsonNorth Dakota184------184
PBFChalmetteLouisiana --307--307
BrayaCome By ChanceNewfoundland Canada--276----276
Total Gallons/Day*----
Total b/d----47,61957,14280,95252,380238,093


The prime catalyst for these conversions comes not from the market but from government policies at both the federal and state level. These include tax credits and environmental regulations ranging from California’s low-carbon fuel standard to the recent federal Inflation Reduction Act (IRA).

Without such policies, most experts say, producing renewable diesel and SAF would not be profitable. However, within the current framework of both governmental action and investors’ interest, renewable fuels tend to help companies achieve their environmental goals.

Against a backdrop of stagnating domestic fuel demand and the Covid-19 pandemic’s catastrophic impacts on downstream margins, these developments have opened a door for downstream players to convert less-profitable facilities to produce renewables.

They come with the added benefit of generating renewable identification numbers (RINs), credits that obligated parties can buy when they do not have physical biofuel volumes available.

RINs are a major operating cost for refiners. Generating them helps alleviate the expense of staying in line with blending mandates.


Renewable diesel plants are popping up all around North America, and interest has been especially high along the US West Coast. California already had the most biofuels plants in the country with five by the start of the year, and both Marathon Petroleum and Phillips 66 are in the process of converting refineries near San Francisco to produce renewable diesel, the former in partnership with Neste.

California’s massive market — the state would be the fifth-largest economy on earth were it an independent country — tends to dominate the Padd 5 region, and it has strict environmental regulations.

HF Sinclair, meanwhile, is adding a renewable diesel unit to its Navajo refinery in New Mexico.

Interest in renewable fuels is also growing along the US Gulf Coast. Valero Energy, long considered a bellwether for the independent refining industry, is engaged in a massive expansion of its Diamond Green Diesel facilities in Louisiana, a joint venture with Darling Ingredients.

Fellow independent PBF Energy is adding renewable diesel capacity to its Chalmette, Louisiana refinery as well. In Alabama, Vertex Energy, a firm that specializes in processing used oils into products, is tweaking its Mobile refinery to produce renewable diesel.

The Atlantic Coast is also seeing the conversion of a refinery, with Newfoundland’s Come-by-Chance facility aiming to begin producing renewable diesel and SAF in the second half of this year.

Biofuels (incl. SAF), Refining, Independent Refiners, Corporate Strategy
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