Exxon, Chevron look to make renewable fuels

    Exxon, Chevron look to make renewable fuels
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    The Chevron Pascagoula refinery is pictured in Pascagoula, Mississippi, USA. Photo: REUTERS / FILE

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    The Chevron Pascagoula refinery is pictured in Pascagoula, Mississippi, USA. Photo: REUTERS / FILE

    U.S. oil company Exxon Mobil Corp., along with Chevron Corp., are seeking to accumulate renewable fuels in the growing space by finding ways to produce such products at existing facilities, sources familiar with the effort said.

    The two largest US oil companies want to produce sustainable fuels without paying billions of dollars spent by some refineries to restructure their production activities.

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    Renewable fuels account for 5% of US fuel consumption, but are expected to increase as various sectors adjust to reduce overall carbon emissions to combat global climate change.

    Both Chevron and Exxon have huge refineries that make a significant contribution to total carbon emissions. The companies have been criticized for a less urgent approach to renewable investment by European competitors Royal Dutch Shell Plc and TotalEnergies and have generally spent a lower percentage of their capital than these companies on “green” technologies.

    Companies are looking at how to process organic raw materials, such as vegetable oils and partially refined petroleum biofuels, to produce renewable diesel, sustainable aviation fuel (SAF) and renewable gasoline, without significantly raising capital.

    Commercial production of renewable fuels is more expensive than conventional gasoline production, unless combined with tax credits.

    A working group was set up at the request of Exxon to the international standards and testing organization ASTM International to determine the refineries’ ability to process up to 50% of certain types of bio-raw materials for SAF production, according to sources.

    Exxon did not respond to a request for comment.

    Chevron is looking at how to run these raw materials through their liquid catalytic converters (FCCs), gasoline plants that are generally the largest component of refineries.

    “Our goal is to jointly process biological reserves at the FCC by the end of 2021,” a Chevron spokesman told Reuters about the supply of renewables to consumers in Southern California.

    The company is working with the US Environmental Protection Agency (EPA) and the California Aviation Resources Council (CARB) to develop a fuel-efficient emission credit method.

    A source familiar with the matter said that if approved by the EPA and CARB, Chevron would be able to generate and generate credit for renewable gasoline.

    This product is not yet commercially available, but it can reduce carbon dioxide emissions by 61% to 83%, depending on the raw material used, according to the California Energy Commission.

    Chevron said in its revenue earlier this month that in the second phase of its process, it would be the first U.S. refinery to use crackers to produce renewable fuels.

    “We did it this way, in part because it’s very cost-effective … It’s literally just a tank and a few pipes,” said Chevron CEO Pierre Breber.

    Congress is considering legislation on tax credits that would further push refiners to process commercially viable aviation fuels.

    Some refineries, such as San Antonio-based Valero Energy Corp. and Finland’s Neste, have increased production of renewable fuels from waste oils and vegetable oils to cash in on lucrative federal and state financial incentives.

    Several US refineries are in the midst of partial or total conversion of plants to produce certain renewable fuels, especially diesel.

    If approved, new methods of producing renewable fuels at refineries could allow refineries to avoid lengthy environmental licensing procedures. Many of these processes are still under further testing to determine which can produce commercially renewable fuels without damaging the refineries.

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