Led a comprehensive 12-week project to develop a refining independent’s North American biofuel strategy and planning outlook. This in-depth engagement provided the client with a clear roadmap for navigating the evolving biofuels landscape. Key deliverables included:
- Biofuel production analysis: Analyzed historical and projected biofuel production in Canada and the US for ethanol, renewable diesel (RD), sustainable aviation fuel (SAF), and biodiesel (BD) from 2015 to 2040.
- Scenario planning: Developed a range of growth scenarios (base, high, and low) considering factors like macroeconomics, feedstock availability, and technological advancements. This approach allowed the client to assess potential risks and opportunities under different market conditions.
- Feedstock price forecasting: Analyzed and forecasted the prices of first- and second-generation feedstocks (corn, canola oil, soybean oil, used cooking oil, animal fats and tallow, and distiller corn oil). The chosen scenario heavily influenced these forecasts, providing the client with a realistic understanding of feedstock cost dynamics.
- Market hub analysis: Analyzed key market hubs for ethanol (CME) and RD (US Gulf Coast, California), examining historical price trends to identify potential buying and selling opportunities.
- Credit market exploration: Explored crucial credit markets for biofuel producers. This included an in-depth analysis of California’s LCFS credit setting mechanism, supply curve, and credit value outlooks. We also examined historical and projected values for US RINS, Blender’s Tax Credit, and Canada’s CFR Credits, along with analysis of credit sourcing routes. This comprehensive analysis equipped the client to make informed decisions regarding credit acquisition strategies.
- Biofuel pricing model: Developed a model that revealed how biofuel prices are determined by feedstock costs, refining costs, and applicable credits. This model provided the client with a valuable tool for evaluating the economic viability of different biofuel production pathways.
- Feedstock supply and demand insights: Provided an overview of historical and projected feedstock supply,demand, and trade for Canada and the US. This information helped the client understand potential feedstock constraints and opportunities in different regions.
- Renewable diesel selling price forecasts: Included historical data and future forecasts for average end-product selling prices of RD derived from various feedstocks. This allowed the client to assess the profitability potential of different RD production options.
- Carbon Intensity (CI) assessment: Provided a comprehensive assessment of the biofuels’ CI values and the underlying drivers. This information is critical for compliance with carbon reduction regulations and for marketing biofuels with a lower carbon footprint.
