Renewable Diesel Market Value Proposition
$8.00
$6.00
$4.00
$2.00
$0.00
($2.00)
($4.00)
($6.00)
($8.00)
Jan-17
" MARGIN NOT INFLUENCED BY COMPONENTS
Industry Gross Margin Index and Components ($/gal)
Mar-17
Jun-17
Sep-17
Dec-17
Stable $2/gallon margin under all conditions; removes commodity risk
Mar-18
Jun-18
Aug-18
Nov-18
LA Carb Diesel
1.7 x D4 RIN
BTC Real Time
LCFS
Crude SBO
RD Crude SBO Margin
Source: Bloomberg, Jacobsen
The volume mandate ensures profitability, not the prices of individual credits
Government mandated volume creates high correlation of feed price and environmental credits
Industry gross margin is stable irrespective of individual components' volatilities
Index does not include industry operating costs estimated at $0.35 - $0.50/gal fully burdened
Falling LCFS prices don't impact gross margins, BTC doesn't influence gross margins
Feb-19
May-19
Aug-19
Nov-19
Jan-20
Apr-20
Jul-20
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Jan-21
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
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$8.00
$6.00
$4.00
$2.00
$-
$(2.00)
$(4.00)
$(6.00)
$(8.00)View entire presentation