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Chevron expands renewable fuels output with more lower carbon business spending

Highlights

Produce 100,000 b/d RD, SAF by 2030

First SAF produced at El Segundo refinery

Diesel hydrotreater conversion to 100% renewables in 2022

Chevron plans to spend $10 billion through 2028 to expand its lower carbon businesses, including increasing output of renewable diesel and sustainable aviation fuel first in markets with strong policy support for renewable fuels, CEO Mike Wirth said Sept. 14.

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Chevron will leverage its existing infrastructure, assets and markets to increase its footprint in renewable fuels, Wirth said during Chevron's Energy Transition Spotlight.

"We've focused first on the US West Coast, where there's already strong policy enablement and also on the US Gulf Coast and select markets in Asia, where we have big businesses and expect policy support to increase over time," he said.

According to S&P Global Platts Analytics, renewable diesel production is expected to reach over 4 million gal/year by 2025, compared with the 538 million gallons produced in 2020.

Chevron said it already has increased renewable diesel sales by 30% ahead of targets given during its investment day. The company also produced its first sustainable aviation fuel at its El Segundo, California, refinery, said Mark Nelson, Chevron's head of downstream operations.

"We're now co-processing about 2,000 b/d of biofeedstock at our El Segundo refinery and just last week, produced our first sustainable aviation fuel there," Nelson said. "Next year, we plan to convert the same diesel hydrotreater to 100% renewable capacity, increasing capacity to 10,000 b/d of renewable diesel."

Chevron said collaborations with Delta Airlines and Google are underway to track the emissions benefits of SAF.

"And while policy support has not yet stimulated the SAF supply chain, these activities prepare us for the future," Nelson said.

Chevron plans to convert more refinery process units to full renewable capacity for less than $1/gal of annual capacity.

"Leveraging our existing refining system and other anticipated actions, we expect to have the capacity to produce about 100,000 b/d of RD and SAF by 2030," Nelson said. "To put this in perspective, capacity of 100,000 b/d in 2030 is enough to supply all Chevron's current West Coast diesel customers with RD and US jet fuel customers with 5% SAF blend."

Strategic partnerships

Earlier this month, Chevron said it would invest $600 million in a joint venture with Bunge, the world's largest oilseed processor, to expand soybean processing capabilities in Illinois and Louisiana to make renewable fuel feedstock.

Bunge currently supplies soybean oil to the El Segundo refinery.

The proposed venture is expected to include existing crushers, with the ability to add more crushers and pretreatment facilities.

"We expect roughly 30% of our biofeedstock to be supplied via this path in the near term with future expansion opportunities down the road," Nelson said.

Chevron is also working with Gevo to make SAF using an alcohol-to-jet process, with Chevron having the right to offtake 10,000 b/d.

"As we convert more of our process units to have renewable capacity with coupled with the new feedstock agreements and pre-treatment options, we're evolving our refining system to have greater feedstock and product flexibility depending on economics and policy drivers," Nelson said.

Currently, about 60% of Chevron's terminals are now capable of handling biodiesel and renewable fuel distribution, with expectations that all US diesel sales will have renewable or some biodiesel content by the end of the decade.