CVR refinery delays renewable diesel production at Wynnewood

CVR's Wynnewood refinery to receive SCOOP crude from new pipeline

 

High feedstock prices have interrupted plans by CVR Refinery in Wynnewood to begin production of a proposed 7,000 barrels a day of renewable diesel.

Carl Icahn’s company made the announcement this week blaming the high price of feedstock caused by several other U.S. refineries joining in the same kind of operation to produce more green fuels from vegetable oil and animal fats. The demand has resulted in sharply-higher prices and as a result also threatened the future of plans by CVR and other refineries.

“Renewable diesel feedstock prices have increased considerably, particularly for refined, bleached and deodorized soybean oil to a level where the economics do not make sense for us to complete the conversion at this time,” said CVR Chief Executive David Lamp.

David Lamp | Management | CVR Energy, Inc.

Other refiners such as Hollyfrontier, Phillips 66, Marathon Petroleum and Valero are among those now competing for the limited supply of feedstocks.

“We believe renewable diesel producers with feedstock contract expirations coming up will be forced to give up some of the margin they currently enjoy,” Lamp said.

Construction on the renewable production at the Wynnewood operation was underway in February with plans to product nearly 100 MMgy of renewable diesel and 6 MMgy of renewable naphtha.

Word of the delay came after CVR Energy announced its second quarter 2021 earnings which included a $6 million net loss or 6 cents per diluted share. The loss was on net sales of $1.8 billion for the quarter compared to a net loss of $5 million or 5 cents a share in the second quarter of 2020.

CVR’s second quarter 2021 EBITDA was $102 million compared to $68 million a year earlier.

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