Calumet Inc. on Aug. 9 released second quarter financial results for Calumet Specialty Products Partners L.P., reporting the company’s Montana Renewables business achieved record sustainable aviation fuel (SAF) production of approximately 7 million gallons. 

During a second quarter earnings call, Calumet CEO Todd Borgmann said Montana Renewables achieved operational records across the board and ran at planned production levels. The facility’s feedstock pretreatment unit allowed it to choose from a full slate of feedstocks, he added, noting that Montana Renewables continues to see its costs becoming more efficient as reliability and utilization increase. 

Borgmann addressed current difficult margins in the renewable diesel industry, noting Calumet is optimistic that improvements are ahead. On the supply side, he cited declining ag commodity prices, incremental biodiesel capacity closure, reduced imports, the conversion of renewable diesel capacity to SAF, and renewable diesel capacity being revered back to crude oil service as factors the company expects to support improved margins. On the demand side, Low Carbon Fuel Standard programs in California and other regions, growing state and global mandates and incentives, legislative response on behalf of the agricultural sector, and higher Renewable Fuel Standard renewable volume obligations for biomass-based diesel and advanced biofuel may also support margin improvements. In the near-term, the expiration of the $1 per gallon tax credit for biodiesel and renewable diesel is expected to reduce imports as they become disadvantaged. Imports of biobased diesel are currently at roughly 1 billon gallons per year, Borgmann added. 

Moving forward, SAF continues to be a focal point for Montana Renewables, Brogmann said. The facility produced nearly 7 million gallons of SAF during the second quarter and currently has 30 million gallons per year of contracted SAF sales. 

Current SAF capacity in the range of 2,000 to 4,000 barrels per day, but Calumet is considering a move to what its calls MaxSAF, which would boost total capacity to 18,000 barrels per day of renewables, including 15,000 barrels per day of SAF. The company is pursuing a loan guarantee from the U.S. Department of Energy to support its MaxSAF initiative. Work to secure that loan guarantee is ongoing. During the earnings call, Brogmann said that given the advanced nature of the loan process and its magnitude to Calumet’s MaxSAF strategy, the company would limit its comments on the DOE process. He noted, however, that the DOE has been an extremely thoughtful and professional group to work with throughout the process and that Calumet is excited to get started on the next steps. 

The Montana/Renewables segment reported $7.9 million of adjusted EBITDA during the second quarter, compared to adjusted EBITDA of $13 million during the same period of last year. The results reflect improved operating results and higher volumes from the company’s renewables business and lower results from the specialty asphalt refinery plant. Overall, Calumet reported a second quarter net loss of $39.1 million, or limited partners’ interest of 48 cents basic net loss per unit. Second quarter adjusted EBITDA was $66.8 million.