Phillip 66's Rodeo Refinery

  • Phillips 66 is converting a crude oil refinery in California into the world's largest renewable fuels plant, the company said Wednesday.
  • The plant will turn used cooking oil, fats, greases, and soybean oil into diesel, gasoline, and jet fuel for the California market, which has a low-carbon-fuel standard.
  • Together with an existing renewable fuels project, the reconfigured plant will produce more than 3 billion litres of fuel a year, beginning as soon as 2024.
  • The announcement comes as oil prices, hammered by the coronavirus pandemic, remain low, indicating that even cheap oil isn't undercutting demand for lower-emissions fuels.
  • For more articles, go to www.BusinessInsider.co.za

US oil refiner Phillips 66 is converting a crude oil refinery in California into the world's largest renewable fuel plant, the company said Wednesday.

Located in Rodeo, California, the reconfigured plant will turn used cooking oil, fats, greases, and soybean oils into more sustainable gasoline and diesel.

The announcement comes as crude oil prices are down more than 30%, indicating that demand for low-emissions fuels remains even when the traditional feedstock is cheap. California, where the fuel will be sold, has a low carbon fuel standard that adds value to fuels that yield lower carbon emissions.

"This capital-efficient investment is expected to deliver strong returns through the sale of high-value products while lowering the plant's operating costs," the company said in a statement.

The facility - which is already home to an existing but smaller sustainable fuels project - could produce more than 3 billion litres of renewable fuel each year by 2024, the company said, pending regulatory approval.

Based in Houston, Phillips 66, which spun off from ConocoPhillips in 2012, operates 13 refineries in the US and Europe and has a market value of $28 billion.

Lowering emissions through biodiesel

Once the transformation is complete, the facility, called Rodeo Renewed, will emit 50% less carbon dioxide and 75% less sulfur dioxide, an air pollutant, than the existing refinery, the company says. Phillips 66 does not have a companywide emissions reduction target.

Phillips 66 will source oils, such as vegetable oil, which is used heavily in the fast-food industry as a frying oil, both domestically and globally, Joe Gannon, a company representative, told Business Insider. The biofuel will be "a 'drop-in' product that works in any traditional diesel vehicle and does not require blending," he said.

Phillips 66 is among a handful of big oil companies including HollyFrontier Corp and CVR Energy, that have been exploring the production of biodiesel, Reuters reports. Phillips 66 has a handful of other low-carbon fuel projects, located in the UK and Nevada, according to the company.

Receive a daily update on your cellphone with all our latest news: click here.

Get the best of our site emailed to you daily: click here.

Also from Business Insider South Africa: