New Zealand eyes forestry waste for biofuels target
New Zealand is looking to turn forestry waste into biofuels to meet its climate goals.
The New Zealand Forest Service is compiling a business case to make biocrude, liquid and solid biofuels from the residues of trees milled within the country.
The government in January agreed in principle to implement a biofuels mandate as part of a range of measures to meet its 2050 carbon neutrality goal. A specific target has not been set yet, although a review of a 2008 biofuels sales obligation that was repealed before coming into effect is due for completion this month. A public consultation will occur during May-June before a final decision in July.
Biofuels under this mandate will initially make up 0.5pc of liable suppliers' gasoline or diesel sales, rising to 2.5pc over four years. New Zealand's current liquid biofuels use is less than 1pc, with diesel consumption close to 3mn t/yr (60,000 b/d) in 2020.
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US House panel advances waterways’ projects bill
US House panel advances waterways’ projects bill
Houston, 27 June (Argus) — A Congressional committee on Wednesday advanced a bill to authorize a bundle of US port and river infrastructure projects for the US Army Corps of Engineers (Corps). The Water Resources Development Act (WRDA) biennially authorizes projects handled by the Corps' civil works program aimed at improving shipping operations at the nation's ports and harbors, and along the inland waterway system. The traditionally bipartisan legislation also approves flood and storm programs, and work on other aspects of water resources infrastructure. The House of Representatives' Transportation and Infrastructure Committee on Wednesday passed the bill by a 61-2 vote. The Senate Committee on Environmental and Public Works passed its own version of the bill on 22 May by a 19-0 vote. Neither the full Senate nor House have yet voted on the bills, which will need a conference committee to sort out different versions. A key difference is that the House bill did not include an adjustment to the cost-sharing structure for lock and dam construction and major rehabilitation projects. The Senate measure adjusted the funding mechanism so that 75pc of costs would be paid for by the US Treasury Department's general fund, with the rest coming from the Inland Waterways Trust Fund. The 2022 version of the bill made permanent an increase to 65pc from the general fund and 35pc from the trust fund, which is funded by a barge diesel fuel tax. The House committee's decision not to include the funding change drew disappointment from shipping interests. The Waterways Council was "disappointed that the House did not include a provision to modernize the inland waterways system", but was hopeful that conference negotiations would result in its inclusion, Tracy Zea, chief executive of the group, said. The latest House version of the bill authorizes 12 projects and 160 new feasibility studies. Among the projects receiving approval were modifications to the Seagirt Loop Channel near the Baltimore Harbor in Maryland. The federal government would pay $47.9mn towards an estimate $63.9mn project to widen the channel, which would help meet future demand for capacity within the Port of Baltimore. That would include increased container volume at the Seagirt Marine Terminal. The project was in the works before the 26 March collapse of the Francis Scott Key Bridge temporarily diverted freight from Seagirt and many other port terminals. The committee also authorized $314.25mn towards a resiliency study of the Gulf Intracoastal Waterway. The study would consider hurricane and storm damage and identify ways to improve navigation, reduce the maintenance requirements, and provide resiliency. The waterway connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. The House version of the bill also includes provisions to strengthen flood control, wastewater, and stormwater infrastructure. "Critically, WRDA 2024 will help communities increase resiliency in the face of climate change," representative Rick Larsen (D-WA) said. By Abby Caplan and Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan aims to tighten SAF supply regulations
Japan aims to tighten SAF supply regulations
Tokyo, 27 June (Argus) — Japan is proposing stricter rules for domestic producers of sustainable aviation fuel (SAF) to help cut greenhouse gas (GHG) emissions, aiming to finalise the discussions later this year. The new proposal was announced on 27 June by the country's joint commission of the government and private sector for promoting SAF. The proposed regulations will require SAF producers to cut GHG emissions from jet fuel use by more than 5pc during the April 2030-March 2035 fiscal year against 2019-20 levels. With Japan's domestic jet fuel supplies at 12.5mn kilolitres (210,000 b/d) in 2019-20, the 5pc reduction equates to 1.58mn t of carbon dioxide. Additional targets beyond 2035 will be further discussed, according to the country's ministry of trade and industry (Meti). The Japanese government decided in 2022 to mandate SAF to account for at least 10pc of domestic airlines' jet fuel consumption by 2030. The new proposals also aim to develop new technology for producing SAF, including alcohol-to-jet fuel technology, according to a Meti official that spoke to Argus. There is also scope to promote synthetic fuel-based SAF, or e-SAF, as it could reduce 80-90pc more GHG emissions compared with biofuel-based SAF, he added. Japan's proposals would exceed SAF regulations globally, given that even the EU's ReFuel EU aviation legislation adopted in 2023 does not mandate the "quality of SAF", the Meti official added. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
ExxonMobil exits, Vitol enters California RD project
ExxonMobil exits, Vitol enters California RD project
New York, 26 June (Argus) — A company hoping to construct a 15,000 b/d renewable diesel refinery in Bakersfield, California, this year has settled a dispute with ExxonMobil and inked a new offtake deal with Swiss commodity trader Vitol, providing a reprieve for a project that has been financially stressed. Global Clean Energy Holdings will pay ExxonMobil $18.2mn as a one-time settlement and cancel all 125,000 shares of Global Class C preferred stock that the US oil major had owned, according to a regulatory filing on Wednesday. Two ExxonMobil employees have exited the Global Clean Energy board. The two companies will also ask the Delaware Court of Chancery to dismiss a complaint brought by ExxonMobil that alleged wrongdoing. ExxonMobil had previously moved to cancel an offtake agreement to purchase much of the plant's expected output, citing various production delays, and asked the Delaware court to compel the release of Global internal files. A Global subsidiary has entered into a new agreement with Vitol, in which the trading firm will be the "exclusive supplier of renewable feedstocks" to the Bakersfield plant and "exclusive offtaker" of all renewable diesel and naphtha produced by the facility and its associated environmental attributes, according to the filing. The two companies also entered into a revolving credit agreement, which provides Global with a working capital loan of $75mn. Global Clean Energy has said it wants the facility's primary feedstock to be camelina oil, which would be more able to capitalize on low-carbon fuel incentives because it comes from a cover crop. But the company said in an April regulatory filing that it expects to use only a "minimal amount" of camelina oil in 2024 and 2025. The filing on Wednesday also lists soybean oil, canola oil, and various waste feedstocks, such as used cooking oil, as potential feedstocks Vitol could supply. The agreement with Vitol provides fresh hope for the long-delayed Bakersfield project, one of a handful of renewable fuels facilities that have set plans to come online in California. Global Clean Energy as recently as last month warned there was "substantial doubt" about its ability to survive, given its debt obligations and the uncertain timing for completing its facility. Vitol can terminate the supply and offtake agreement, which is otherwise set to last for three years and can be extended for two more, if the project is not producing at least 5,000 b/d of renewable diesel by 31 October this year. Global Clean Energy declined to provide more details on its construction timeline today but said in a regulatory filing last month that it planned to commence "the start-up phase" of the project this month and begin initial commercial operations during the third quarter. The facility, if completed, could face additional headwinds. Declining prices over the last year for federal renewable identification numbers (RINs) and California low-carbon fuel standard credits have depressed margins for renewable diesel producers. And the growth of biorefineries in the state — including Phillips 66's Rodeo facility that the company said Wednesday is running at full capacity — could mean steep competition for feedstocks. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Phillips 66 completes Rodeo renewables conversion
Phillips 66 completes Rodeo renewables conversion
Houston, 26 June (Argus) — Phillips 66's Rodeo, California, refinery has completed a multi-year, billion-dollar conversion to process only renewable feedstocks, increasing throughput rates to 50,000 b/d. The 128-year-old Rodeo plant stopped processing crude in February , taking up to 115,000 b/d of oil refining capacity offline as it transitioned to producing renewable diesel (RD) and, eventually, sustainable aviation fuel (SAF). The plant initially bought and refined pre-treated feedstocks while building its own 40,000 b/d pre-treatment unit (PTU), whose two 20,000 b/d trains will prepare raw feeds such as used cooking oil, fats, greases and vegetable oil for Rodeo's three renewable diesel units (RDUs) before the end of this month. "The pre-treatment area will run at max rates as soon as it's commissioned," and refine harder-to-process feedstocks later in the year, Rodeo refinery manager Jolie Rhinehart told Argus on site at the plant earlier this month. "Our units will be able to process the lowest carbon intensity (CI) feedstocks, something that's called brown grease." There is also a financial incentive to process lower CI feeds. "That's how you really make money in these assets," Phillips 66 chief executive Mark Lashier told investors at the JP Morgan Energy Power & Renewables conference earlier this month. While optimizing feedstocks may help boost profits at the plant, Low Carbon Fuel Standard (LCFS) credits — which provide much of the financial incentive for renewable fuel conversions — are in the doldrums. A robust supply of low-carbon fuels such as RD to west coast markets has outstripped demand in recent years, helping drive down LCFS credit prices to nine-year lows earlier this month. But the unbalanced market has not led Phillips 66 to alter its strategy. Ample demand for renewable fuels There will be "ample" demand for Rodeo's refined products in the short-term, Rhinehart told Argus . "One thing that is stronger than ever is demand for liquid transportation fuels in the state of California." She plans to run the Rodeo plant like Phillip 66's other crude refineries, altering throughputs according to the cost and availability of feedstocks and the price that it can sell finished product. "We're not going to run if we're not making money," Rhinehart said. Still, the company has signaled its intention to run high rates. "We see good economic incentives to run and run full [at Rodeo]," Lashier told conference attendees, noting that while LCFS credits are "compressed," feedstock costs are also lower than the company anticipated. Another part of the profitability equation Phillips 66 does have control over is the infrastructure to distribute RD, selling Rodeo's product alongside conventional fuels at its "76" brand gas stations across the west coast. The company owns a products pipeline that connects Rodeo to a Phillips 66 marine and truck rack terminal on the San Francisco Bay, just south of Chevron's 245,000 b/d Richmond refinery ( See map). "We're very confident in our ability to place all those [renewable product] barrels locally," Rhinehart said. "And if there's demand outside of the region, we will surely supply that if the market supports it." Rodeo has so far supplied RD to California, Washington and Oregon and the Canadian province of British Columbia. Like a conventional crude refinery, the Rodeo complex will also periodically reduce throughputs for maintenance. Rhinehart expects a catalyst change for one of its reactors every year-and-a-half and a full catalyst change for all reactors every three years. Although Rodeo is up and running, permitting difficulties could preclude any future expansion of the plant. Rhinehart has a "substantial" list of projects she would like to progress, potentially including green hydrogen, but worries whether the company could make it through the permitting process. This was a concern also voiced by Phillips 66's executive vice president of emerging energy and sustainability Zhanna Golodryga in an interview with Argus at the company's Houston headquarters earlier this month. "We probably could have brought Rodeo online sooner if we didn't have to wait for some permits," she said in reference to a back-and-forth with Contra Costa County late last year over Rodeo's environmental impact review. Golodryga is eyeing the Gulf coast for Phillips 66's next low carbon energy hub, believing that Texas is the energy transitions Silicon Valley. By Nathan Risser Phillips 66's west coast refining assets Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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