Carl Icahn’s CVR Energy (CVI.N) is moving forward with plans to produce renewable diesel at its Wynnewood, Oklahoma refinery in Spring of 2022 after halting the proposal earlier this year due to high soybean oil prices, executives said on Tuesday.
However, plans to produce renewable fuels at its Coffeyville refinery in Kansas will depend on the expansion of low carbon fuel standard programs throughout America.
Various states such as New York and New Mexico are eying the adoption of low carbon fuel standards similar to California’s landmark program. The program offers incentives for greener fuels by awarding tradable credits to producers that reduce the carbon intensity of their transportation fuels.
“We need a couple of those to happen to really have the Coffeyville conversion,” said chief executive David Lamp on the company’s third quarter earnings call on Tuesday.
CVR Energy is eying production of 50 million gallons of renewable fuel at Coffeyville, potentially including 25 million gallons of sustainable aviation fuel if regulatory conditions change.
Until Wynnewood’s pretreater unit is up and running the company plans to run refined deodorized and bleached soybean oil and treated corn oil.
Soybean oil prices have fallen back from highs earlier this year. Lamp attributed the prices to demand from other renewable diesel projects coming online.
Lower prices combined with other subsidies have caused Wynnewood project economics to drift back into positive territory, he said.
CVR’s refining peers Marathon Petroleum (MPC.N) and Chevron Corp (CVX.N) recently announced joint ventures that would allow them to own soybean oil crushers to secure feedstocks for their renewable projects.
“There’s many cases out there for new crushers that need to be built, and we think our location is a pretty good one for that. And we’ll look for a call on the oil to take a position in those projects,” Lamp said.