George Hoekstra

Refinery distillation units separate crude oil into light, medium and heavy fractions. After that, refiners start performing chemical reactions using catalysts — materials that accelerate chemical reactions — to change the oil’s natural molecules into the forms needed in modern fuels. In recent years, refiners have stepped up their efforts to recycle those catalysts to improve their profitability and environmental performance. In today’s RBN blog, we explain how catalysts, which were formerly disposed of as hazardous waste, are increasingly being recycled and reused in refineries. 

How can a business survive and thrive while spending $5.30 to make a product that sells for $1.90? That’s what’s happening in the booming renewable diesel (RD) market, where government subsidies allow RD to compete directly with petroleum diesel even though RD is inherently more costly to produce. But as new plants keep coming on stream, RD profit margins are coming under closer scrutiny. In today’s RBN blog, we analyze RD profit margins and show how they are changing as the market continues to expand. 

When the price of the Tier 3 sulfur credit hit a new high of $3,600 in October 2023, the tradable sulfur credit for gasoline moved from the background to center stage in refining circles. And while credit prices have retreated slightly to about $3,400, they still represent a nearly 10-fold increase over two years and translate to a Tier 3 compliance cost of almost $3/bbl, raising concerns from refiners in a highly competitive market. In today’s RBN blog, we look at how refiners are adapting and the investments that could reduce the cost of compliance. 

The price of the Tier 3 gasoline sulfur credit hit $3,600 in October, up by a factor of 10 from two years ago and roughly in line with the all-time highs seen in late 2019. This tradable credit allows refiners to sell gasoline that exceeds the sulfur specification on gasoline sold in the U.S. In today’s RBN blog, we examine what’s behind the credit’s steep and steady rise — and why it matters. 

If you buy premium gasoline, you’ve probably noticed its price differential versus regular has been increasing in recent years. That is a sign of the rising value of octane, the primary yardstick of gasoline quality and price. In this blog series we’ve examined a new gasoline sulfur specification called Tier 3, which is causing complications for U.S. refiners looking to balance octane and gasoline production while still meeting the regulatory limits on sulfur. In today’s RBN blog, the fourth and final on this topic, we provide an analysis of the obscure Sulfur Credit Averaging, Banking and Trading (ABT) system, which allows refiners to buy credits to stay in compliance with the Tier 3 specs. The price of these credits quintupled in 2022, another sign of a tight octane market that will be attracting increased attention in the months and years ahead.