Phillips 66 on July 30 confirmed its Rodeo Renewable Energy Complex in California will begin producing sustainable aviation fuel (SAF) during the third quarter. The company also expects renewable diesel margins to improve later this year.

Company officials discussed operations at the Rodeo Renewable Energy Complex during a second quarter earnings call.  

The biorefinery project has been under development since mid-2022 and reached full processing rates of approximately 50,000 barrels per day during the second quarter of 2024. Phillips 66 Chairman and CEO Mark Lashier explained that the facility’s two hydrocrackers and both pretreatment units are now fully operational. The facility is currently transitioning to lower carbon intensity (CI) feedstocks as the company optimizes the economic performance of the facility, he added. 

Rich Harbison, executive vice president of refining at Phillips 66, said the Rodeo facility has been running approximately 50% to 55% soybean oil, but plans to increase the share of lower CI feedstocks throughout the third and fourth quarters. 

According to Harbison, SAF production will begin during the third quarter, with SAF sales beginning in the fourth quarter. The Rodeo facility will be able to blend up to 20,000 barrels per day of SAF, he added. 

Brian Mandell, executive vice president of marking and commercial at Phillips 66, said that biofuel margins were low, but positive during the second quarter despite a 10% increase in renewable diesel consumption when compared to the first quarter of the year. Looking into the future, Mandell said the company currently expects renewable diesel margins to begin to improve. He cited several factors the company expects to contribute to improved margins, including the conversion of some current renewable diesel capacity to SAF, the shutdown of additional marginal biodiesel producers, declining feedstock prices as new crush facilities open in the U.S. and Canada, and changing tax credit structures.