CVR Energy Refinery to Produce Renewable Diesel

CVR Energy announced that it will convert its Wynnewood refinery’s hydrocracker unit to renewable diesel service. Upon completion, which is expected in mid-2021, the refinery in Wynnewood, Oklahoma, should have the capability to produce nearly 100 million gallons of renewable diesel per year and more than 6 million gallons of renewable naphtha per year, significantly reducing its annual Renewable Identification Number exposure under the Clean Air Act’s Renewable Fuel Standard, the company says.

“We are pleased to report that our Board of Directors has granted final approval on Phase 1 of our renewable diesel strategy,” says Dave Lamp, chief executive officer of CVR Energy, Sugar Land, Texas. “By leveraging assets already in place, particularly the existing hydrocracker unit and underutilized hydrogen plant at our Wynnewood refinery, we believe we can deliver one of the lowest cost renewable diesel projects in the industry.

“Detailed engineering design work for the project is underway,” Lamp says. “We also have ordered long lead-time equipment and began construction work, as authorized by the Oklahoma Department of Environmental Quality’s permitting rules. We continue to expect the unit to be in service by July 1, 2021.”

The company currently estimates total capital costs for the project to be approximately $110 million, or $1.10 per gallon of renewable diesel capacity, most of which should be recouped by the end of 2022 through the generation of RINs as well as Blender’s Tax and Low Carbon Fuel Standard credits. The project is expected to produce more than 100 million gallons of renewable diesel and renewable naphtha per year, which would generate 170 million to 180 million RINs. “Between our existing blending capabilities and the RINs generated from renewable diesel, we expect our total net purchases would be less than 80 million RINs per year once the unit is up and running,” Lamp says.

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