Oil refiners, unions press U.S. EPA on biofuel blending costs

Oil refining company and labor union representatives pressed the U.S. Environmental Protection Agency at a virtual meeting last week to lower costs of the nation's biofuel blending program when it resets the policy next year, according to sources familiar with the call, said Reuters.

The refining industry and unions representing its workers have grown more concerned about the impact of an expected overhaul of the Renewable Fuel Standard (RFS). It requires refiners to blend billions of gallons per year of biofuels like ethanol into the nation's fuel or buy credits called RINs from those that do. When Congress enacted the RFS in 2005, it set yearly volume requirement targets of renewable fuel through 2022 and gave the EPA broad authority to reshape the policy after that. The EPA is expected to propose changes by mid-September.

In a virtual meeting last week, representatives of PBF Energy Inc and Monroe Energy LLC discussed RINs policy with EPA officials, according to three sources familiar with the matter. Both companies have refineries near or in President Joe Biden's home state of Delaware. Two of the sources said refinery representatives asked the EPA for measures that could lower the steep costs of the credits. Small refiners say high RINs costs could put them out of business.

The EPA told the refiners and labor groups, which included the boilermakers and steamfitters, that they need to appeal to lawmakers or officials in the administration for any changes to RINS policy and pricing, two of the sources said. That comment appeared to frustrate the refining and labor representatives, one source said.

All three sources asked not to be named because they were not authorized to publicly discuss details of the call. It was unclear who initiated last week's meeting. The EPA said it has met with multiple stakeholders over the last several months to gather input on the upcoming RFS proposal. "We encourage stakeholders to share their perspectives with us and other parts of the administration to ensure our regulatory decisions are based on the best information possible," said EPA spokesperson Lindsay Hamilton.

Monroe and PBF did not immediately respond to a request for comment. Biden and his fellow Democrats are feeling heavy pressure for soaring pump prices and rising consumer costs heading into the November midterm elections. The administration has been pressing refiners and oil drillers to quickly ramp up production.

Last month, Biden wrote a letter to executives from Marathon Petroleum Corp, Valero Energy Corp and Exxon Mobil Corp, complaining they had cut back on oil refining to pad profits. Refiners denied the accusation, saying they were producing near full capacity.

They have also complained vocally that the Biden administration has set biofuel blending volumes too high and has been stingy with waivers from the biofuel mandates meant to help small refiners stay afloat. Fuel producers have been enjoying big profit margins lately thanks to strong demand and tight supply. But the industry has been in long-term decline because of volatile markets, regulatory pressure on fossil fuels, and slow consumption growth. Many refiners have shut down or retooled into biofuel plants in recent years, which has contributed to the current price spike.

EPA has been mum on its plans for the RFS reset. Stakeholders expect the agency to issue multi-year proposals for blending requirements to reduce regulatory uncertainty for refiners and biofuel producers alike. The agency is also expected to somehow incorporate the electric vehicle industry into the next phase of the RFS, which would help advance Biden's efforts to reduce greenhouse gas emissions from transportation and fight climate change. Refiners and biofuel producers both oppose that idea.

As per MRC, the EIA's new report, titled Global Surplus Crude Oil Production Capacity, provides estimates of global surplus crude oil production capacity in both OPEC countries and non-OPEC countries. Preliminary estimates for these data show that, as of May 2022, surplus capacity in non-OPEC countries decreased by 80% compared with 2021. The data show that, in 2021, 1.4 MMbpd of surplus production capacity was available in non-OPEC countries, about 60% of which was in Russia. As of May 2022, we estimate that all surplus production capacity in Russia was eliminated due to the sanctions implemented after Russia’s full-scale invasion of Ukraine. We determined that excess oil production capacity declined in other non-OPEC producing countries as well. We estimate that, as of May 2022, producers in non-OPEC countries had about 280,000 bpd of surplus production capacity.
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Sharing a common vision where biofuels have a key role to play in reducing the greenhouse gas emissions in transportation – Neste, MAN and Altens have signed a partnership contract aimed at promoting biofuels in France, said Hydrocarbonprocessing.

France is a strong market for biodiesel and FAME, but many OEMs would like to see more renewable diesel, also known as HVO100, on the market. The objective of this partnership is to promote the common vision of Neste, MAN and Altens of the crucial role that biofuels can and must play in the sustainability transformation of the transportation of goods and people.

“This partnership with Neste, a world leader in producing renewable diesel, and Altens, a multi-biofuel supplier in France reinforces MAN's multi-biofuel approach," says Jean-Yves Kerbrat, Managing Director of MAN Truck & Bus France. “MAN advocates sustainable biofuels as opposed to fossil fuels because they allow significant reductions in CO2 emissions and are easy to implement solutions in the short term,” Jean-Yves continues.

MAN Truck and Bus France as an industrial vehicle manufacturer offering several biofuel solutions (HVO100, B100 and biogas) is convinced that biofuels is a solution that is available here and now, reducing greenhouse gas emissions in the already existing vehicle fleets and engine technologies, not requiring any additional investments into these.

“Neste MY Renewable Diesel is a high-quality, high-performance fuel, a more sustainable alternative to fossil diesel, helping its users reduce greenhouse gas emissions by up to 90%* when emissions over the fuel's life cycle are compared with fossil diesel. With Neste MY Renewable Diesel, companies can reduce their climate emissions significantly in an instant by just changing the fuel,'' says Peter Zonneveld, Vice President Sales, Europe and APAC, Renewable Road Transportation at Neste. “We are committed to supporting our customers to reduce their greenhouse gas emissions by at least 20 MMtpy by 2030,” Peter Zonneveld said.

As per MRC, Neste has made the final investment decision to invest into new renewable products production capacity in Rotterdam. The decision is based on demand for renewable products growing substantially with customers' higher climate ambitions. Neste’s current 1.4 MMt capacity for renewable products in Rotterdam is the largest in Europe. The Rotterdam refinery expansion investment of approximately EUR 1.9 B will expand Neste’s overall renewable product capacity by 1.3 MMtpy, bringing the total renewable product capacity in Rotterdam to 2.7 MMt annually, of which sustainable aviation fuel (SAF) production capability will be 1.2 MMt. The company’s target is to start up the new production unit during the first half of 2026.
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Repsol allies with Suma Capital, the leading ESG and impact investment manager in Spain, to create the SC Net Zero Tech Ventures fund, to invest in companies developing promising technologies in decarbonization and circular economy with the ambition of accelerating their application on an industrial scale, said the company.

Repsol will contribute EUR50 million to this fund, which will bring in new investors, and up to total capital of EUR150 million. The fund will have clear sustainability objectives and promote the double transition, digital and green, in the important challenge of the fight against climate change where new technologies will play a key role.

Also, Repsol Corporate Venturing, the multi-energy company's vehicle for investing in technology startups, created in 2016, now ends one stage, and will be renamed Repsol Deep Tech for the next stage. It will be exclusively owned by the company and endowed with EUR50 million to make minority investments in startups that are in the early stages of developing technologies for decarbonization.

Through these two new funds, which complement each other, Repsol creates a new model of open innovation and collaboration with the entrepreneurial ecosystem. The objective is to diversify its venture capital investment strategy and combine its internal capabilities in innovation and proprietary technology development with participation in technology startups. The strategic objectives of these funds support the company's goal of achieving net zero emissions by 2050, identifying new opportunities and technologies that will contribute to the achievement of its decarbonization objectives.

As per MRC, Repsol will build a new plant in Tarragona, with an investment of over EUR35 M for the manufacture of Cross-linkable Polyethylene (XLPE), a polymer used in cable insulation, located between the conductor and the outer protective layers. The plant will have an annual capacity of 27 kt and is scheduled to start in mid-2024. The LSHC (Linear Short Hyperclean) new technology selected for the plant, from Buss AG, will provide a product with very competitive properties, enabling Repsol to complete its product range for cables by incorporating materials for HV (high voltage) and EHV (extra-high voltage) cables.

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AkzoNobel (Amsterdam, the Netherlands) is to bolster its performance coatings portfolio after reaching an agreement to acquire the wheel liquid coatings business of Lankwitzer Lackfabrik GmbH. Completion, which is subject to regulatory approvals, is expected before the end of 2022, said Chemengonline.

Lankwitzer’s Rims and Wheel business operates out of a manufacturing site in Leipzig, Germany. Its products are approved for use by car manufacturers such as Daimler, Audi, VW, Opel, Fiat and Renault. “Acquiring this attractive business will complement our existing powder coatings portfolio and expand the range of innovative products we supply,” explains Michael Friede, AkzoNobel’s Chief Commercial Officer – Performance Coatings. “We’ll be able to provide a comprehensive liquid and powder aluminum wheel coating offering to customers, becoming a one-stop-shop for the wheels industry, which will significantly reinforce our position in an important automotive market."

He adds that the intended deal is also another clear sign that the company is continuing to make good progress with its strategic ambitions: “It’s a great match which aligns perfectly with our Grow & Deliver strategy and will give us access to new sectors of a market with exciting opportunities.

Commenting on the proposed acquisition, Dr. Leo Rokeach, Lankwitzer Managing Director, says: “We’re immensely proud of the business we’ve built here at Lankwitzer Leipzig. It’s now time to let our people and clients benefit from a global environment, which AkzoNobel undoubtedly offers. Being part of AkzoNobel’s worldwide activities will offer attractive growth prospects for the Leipzig site and its employees."

As well as the Leipzig facility, Lankwitzer’s wheel coatings business – which has a growing presence in China – operates laboratories in Germany (Leipzig) and Turkiye. The intended transaction follows on from a series of recent acquisitions by AkzoNobel over the last two years, including Grupo Orbis in Latin America, Titan Paints in Spain and Portugal, New Nautical Coatings in the US and, most recently, the intended acquisition of the African paints and coatings activities of Kansai Paint.

As per MRC, AkzoNobel has invested in a new production line for water-based texture paints at its Songjiang site in Shanghai, China – boosting capacity for supplying more sustainable products. The site is one of four water-based decorative paints plants in China and among the company’s largest globally. The new 2,500 square meter facility will produce Dulux products for various markets, such as interior decoration, architecture and leisure.
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Perstorp AB (Malmo, Sweden) has announced the completion of a capacity expansion for2-Ethylhexanoic Acid (2-EHA), one of the group’s flagship products for which Perstorp has the largest production capacity in the world. Earlier this year, Perstorp’s plant Stenungsund, Sweden, further increased the capacity to meet global demand from customers, said Chemengonline.

2-EHA is widely used in safety glass for car windows, synthetic lubricants, paint driers and corrosion inhibitors. To increase capacity has been on the wish list for quite some time. “This expansion is really important to further strengthen our position in the 2-EHA market. There is a healthy demand from our customers and these extra volumes are most welcome”, says Betty Lu, VP Business Oxo and Plasticizers.

The capacity expansion has been secured via debottlenecking of two existing plants at the site in Stenungsund, Sweden. Project Manager from GTI, Global Technology & Investments, Andreas Utbult explains: “To enable the expansion, modifications were required for both 2-EHAL production and 2-EHA production. The installations included new installations as well as replacement and modification of existing equipment, piping and instrumentation."

“It was a very intense period with a lot of work happening at the same time. I must say that it was the good cooperation between all involved that made the project successful and it feels great to be able to deliver on and exceed the project objectives,” Andreas adds.

As per MRC, Perstorp is taking a stand by converting a large majority of the polyols produced at their largest production plant in Perstorp, Sweden, to Pro-Environment products. By doing this, Perstorp will enable reduced greenhouse gas emissions for its polyol customers and downstream value chains.
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