Phillips 66 to build world’s largest renewable diesel, sustainable aviation fuel plant

August 12, 2020 | Jim Lane

800 million gallon monster slated for 2024 opening as P66 says it will convert Rodeo Refinery to renewables

The project is located on the eastern shore of San Francisco Bay.

In Texas, Phillips 66 will reconfigure its San Francisco Refinery in Rodeo, California, to produce 680 million gallons annually of renewable diesel, renewable gasoline, and sustainable jet fuel. Combined with the production of renewable fuels from an existing project in development, the plant would produce greater than 800 million gallons a year of renewable fuels, making it the world’s largest facility of its kind. The plant would no longer produce fuels from crude oil, but instead would make fuels from used cooking oil, fats, greases and soybean oils.

The announcement comes a day after ExxonMobil announced a 525 million gallon offtake agreement, over 5 years, with the planned Global Clean Energy Holdings project in Bakersfield, California.

Phillips 66 also announced plans to shut down the Rodeo Carbon Plant and Santa Maria refining facility in Arroyo Grande, California, in 2023. Associated crude oil pipelines will be taken out of service in phases starting in 2023.

The refinery is located in north Contra Costa County on the east side of San Francisco Bay.

The project

The project scope includes the construction of pre-treatment units and the repurposing of existing hydrocracking units to enable production of renewable fuels. The plant will utilize its flexible logistics infrastructure to bring in cooking oil, fats, greases and soybean oils from global sources and supply renewable fuels to the California market. 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 Timeline

If approved by Contra Costa County officials and the Bay Area Air Quality Management District, renewable fuels production is expected to begin in early 2024. Once reconfigured, the plant will no longer transport or process crude oil.

The plant is expected to employ more than 400 jobs and up to 500 construction jobs, using local union labor, including the Contra Costa County Building & Construction Trades.

Phillips 66 is strongly emphasizing the low-carbon attributes of renewable diesel.

The Backstory: Washington state project cancelled last January

In January, we reported that Phillips 66 and Renewable Energy Group had discontinued their joint effort to construct a large-scale renewable diesel plant in Ferndale, Washington. The project had been canceled due to permitting delays and uncertainties. Originally announced in fall 2018, this 250 million gallon per year project would have resulted in the largest renewable diesel refinery on the West Coast.

“While we believe the Ferndale Refinery is a strategic fit for this renewable diesel project, permitting uncertainties were leading to delays and higher costs,” said Robert Herman, Phillips 66 executive vice president of Refining. “Phillips 66 continues to progress its portfolio of renewable diesel projects and evaluate new opportunities to provide consumers with renewable fuels that comply with low-carbon fuel standards.”

“Although we are disappointed in this result, REG is undeterred and continues to develop numerous opportunities to grow our renewable diesel production,” said Cynthia “CJ” Warner, Renewable Energy Group CEO at the time. “We remain dedicated to positively impacting the environment and reducing the carbon intensity of transportation fuels through the application of REG’s proven technologies.”

Reaction from the stakeholders

“Phillips 66 is taking a significant step with RodeoRenewed to support demand for renewable fuels and help California meet its low carbon objectives,” said Greg Garland, chairman and CEO of Phillips 66. “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. This project is a great example of how Phillips 66 is making investments in the energy transition that will create long term value for our shareholders.”