Story at a glance
- Phillips 66 said it will stop making fuels from crude oil once the conversion is complete.
- The company said it expects to produce 680 million gallons per year of renewable diesel and gasoline and sustainable jet fuel.
- The conversion is expected to cut the plant’s greenhouse gas emissions by 50 percent.
Fuel maker Phillips 66 is moving to convert a San Francisco-area crude oil refinery into the world’s largest renewable fuels plant by early 2024, the company announced Wednesday.
The facility located in Rodeo, Calif., will be reconfigured to no longer produce fuels from crude oil and instead produce renewable fuel from used cooking oil, fats, greases and soybean oils.
The company said it expects to produce 680 million gallons a year of renewable diesel and gasoline and sustainable jet fuel. When combined with production from an existing smaller sustainable fuels project, the facility could produce more than 800 million gallons of renewable fuels each year by 2024, pending regulatory approval.
The conversion is expected to cut the plant’s greenhouse gas emissions by 50 percent.
“Phillips 66 is taking a significant step with RodeoRenewed to support demand for renewable fuels and help California meet its low carbon objectives,” Greg Garland, chairman and CEO of Phillips 66, said in a statement. “We believe the world will require a mix of fuels to meet the growing need for affordable energy, and the renewable fuels from RodeoRenewed will be an important part of that mix.”
The energy giant said the capital-efficient investment is expected to deliver strong returns through the sale of “high value products while lowering the plant’s operating costs.”
The announcement comes as crude oil prices dropped more than 30 percent as the coronavirus pandemic has disrupted demand for gasoline and jet fuel. Global oil consumption is expected to stay depressed for years as a result of the coronavirus crisis.
Meanwhile, demand for renewable fuel is in a position to potentially grow as government regulations in states like California are aimed at dramatically cutting greenhouse gas emissions.