Renewable Diesel Feedstock Perspective
RD INDUSTRY: STABLE AND STRONG GROSS MARGIN
Individual margin components are independently volatile, but collectively stable
"Crack Spread" - A Gross Margin Index for the Renewable Diesel Industry
LA Carb Diesel
1.7 x D4 RIN
Crude SBO
BTC Real Time
Crude SBO Margin
Low Diesel Prices:
Avg Margin: $1.86/gal
Commentary
Industry margin stable/rising in
the range of $1.50 - $2.00/gal
"no matter what"
-
LCFS
($/gal)
Retroactive BTC:
Avg Margin: $1.44/gal+ $1/gal = $2.44/gal(1)
$10.00
$8.00
$6.00
$4.00
$2.00
$-
$(2.00)
$(4.00)
$(6.00)
$(8.00)
2017
Low LCFS Prices
Avg Margin: $1.58/gal
2018
2019
2020
2021
Low D4 RIN Prices:
Avg Margin: $1.49/gal
High SBO Costs:
Avg Margin: $1.96/gal
Source: Bloomberg, Jacobsen.
(1)
BTC was not in effect during this time period (2017-2020) but was applied retroactively when enacted.
2022
.
MRL anticipates an additional
~$0.40/gallogistics advantage
over USGC producers
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