Phillips 66 on July 25 released second quarter financial results, reporting the company’s Rodeo Renewable Energy Complex in California continues to run at reduced rates due to market conditions. Pre-tax income for the renewables segment was up when compared to the first quarter due to higher realized margins, including inventory impacts as well as increased credits, according to the company.Phillips 66’s renewable fuels business segment processes renewable feedstocks into renewable fuels at its Rodeo facility in California and the Humber refinery in the U.K. The segment also includes global activities to procure renewable feedstocks, manage certain regulatory credits and market renewable fuels.&nbsp;Development on the Rodeo Renewable Energy Complex began in mid-2022 and the facility reached full processing rates during the second quarter of 2024.&nbsp;The biorefinery <a href="https://biomassmagazine.com/articles/phillips-66-expects-renewable-diesel-margins-to-improve">began producing sustainable aviation fuel (SAF)</a>&nbsp;in September 2024.&nbsp;According to Phillips 66, the facility has the capacity to produce approximately 50,000 barrels per day (800 MMgy) of renewable fuels.&nbsp;Renewable fuel production during the second quarter averaged 40,000 barrels per day, down from 44,000 barrels per day during the first quarter of 2025, but up when compared to the 31,000 barrels per day produced during the second quarter of last year.&nbsp;Sales of renewable fuels averaged 71,000 barrels per day during the second quarter, up from 45,000 barrels per day during the same period of 2024.The renewable fuels segment reported a $133 million earnings loss for the second quarter, compared to a $185 million loss reported for the first quarter. Adjusted EBITDA was negative $110 million, compared to negative $163 million.&nbsp;During an earnings call, Phillips 66 Executive Vice President of Marketing and Commercial Brian Mandell confirmed that renewable margins were slightly weaker during the second quarter than they were during the first three months of the year. “We are running at reduced rates,” he said. “In the second quarter, we ran at reduced rates, and we continue to run at reduced rates.” Operations during the third quarter will depend on various market conditions, he indicated. &nbsp;Mandell pointed to several regulatory headwinds the Rodeo facility is facing. This includes changes in the 45Z clean fuel production credit that limit credit eligibility to fuels made from feedstocks produced in the U.S., Mexico and Canada, and eliminate the premium value of the credit for sustainable aviation fuel (SAF). He also noted that the U.S. EPA’s proposal to reduce renewable identification number (RIN) generation for fuels made from imported feedstocks “will present a challenge.”&nbsp;“We’re doing a lot of things in self-help, including talking to state and federal regulators to promote profitability for the plant,” Mandell added. “Additionally, we’re working very hard on lowering the cost of operating the plant…and we’re thinking about how to adjust operations to increase SAF production and also to provide additional optionality for feedstocks.”&nbsp;Mandell also highlighted some market tailwinds, including potentially stronger Low Carbon Fuel Standard and RIN credits as a result of tighter regulations. In addition, he noted European markets are driving greater incentives, with the company exporting to Europe almost every month this year. “There are stronger biofuels programs in Oregon and Washington and stronger Canadian markets as well,” Mandell added.&nbsp;According to Mandell, the Rodeo complex is one of the world’s largest renewable diesel and SAF facilities. “We can…generate up to 15% of the country’s D4 and D5 RINs,” he said. “So ensuring profitability for the plant will be important for energy supply for affordable energy across the country, given the RIN generation and for energy dominance in the United States.” &nbsp;Phillips 66 President and CEO Mark Lashier said that the losses for the renewable fuels segment are “unacceptable and unsustainable,” noting that the Rodeo facility is strategic asset not just for Phillips 66, but for the country due to the volume of renewable diesel it produces and the capability to produce SAF. “We are fully engaged at the federal level and fully engaged at the state level in California to make sure all the right choices are made to support this strategic asset,” Lashier added.&nbsp;Overall, Phillips 66 reported second quarter earnings of $877 million, up from $487 million during the first quarter. Adjusted EBITDA was $2.5 billion, up from $736 million during the first quarter, and earnings per share was at $2.15, compared to $1.18.&nbsp;

2025-07-28 - Phillips 66: Rodeo facility operates at reduced capacity in Q2 (3 publications)

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Phillips 66 on July 25 released Q2 financial results, reporting the company’s Rodeo Renewable Energy Complex in California continues to run at reduced rates due to market conditions. Pre-tax income for the renewables segment was up when compared to Q1. 

Phillips 66: Rodeo facility operates at reduced capacity in Q2

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