Covid-19 Restaurant Shutdowns Affected Biofuel Feedstock Supply

Oil refiners are facing a drop in used fats for use as feedstock in biofuels due to restaurant closures during COVID-19 lockdowns, Oils & Fats International reported citing Bloomberg report. The shortfall in supplies due to the global pandemic came against a backdrop of refineries being converted into renewable diesel plants. California, for example, was one of the world’s biggest markets for renewable diesel, partly due to a decade-long subsidy program designed to lower emissions from transport fuels.

The incentives had prompted US refiners including Phillips 66, Marathon Petroleum, HollyFrontier and Valero Energy to develop biofuel plants that ran on a mixture of used cooking grease, discarded animal fat from abattoirs and oils made from soyabeans and corn. At least 10 projects were planned over the next few years in the USA, according to Credit Suisse Group. However, if all the plants were built, the demand for raw materials could rise seven-fold to about 40bn pounds/year by 2025, according to Ryan Standard, director of price reporting agency Jacobson Market Intelligence. Used cooking oil (UCO) and US beef fat, known as tallow, accounted for 64% of the feedstock used to make renewable diesel last year in California, Bloomberg said.

According to forecasts by OpenTable, one in four US restaurants would go out of business as COVID-19 kept people home, leading to a drop in used cooking oil. Meanwhile, in San Francisco, Phillips 66 was currently converting its refinery in the region into one of the world’s largest renewable fuel plants, Bloomberg said.  Operations could start by 2024, producing more than 680M gallons/year of renewable diesel and gasoline, and also sustainable jet fuel.