HOUSTON (ICIS)--Amid reduced demand for gasoline related to the coronavirus pandemic and growing momentum for sustainability and lower carbon emissions, Marathon Petroleum announced that it will proceed with plans to convert its Martinez, California refinery to a renewable fuels manufacturing facility.
The facility is expected to start producing renewable fuels - predominantly renewable diesel - in 2022, with a build to full capacity of 730m gal/year of low-carbon renewable fuels in 2023.
The exact cost of the conversion was not included in the release, but the company announced a capital expenditure (capex) budget of $350m for 2021.
Marathon CEO Michael Hennigan said in February during a Q4 2020 earnings conference call that the company was "advancing discussions with feedstock suppliers and potential commercial partners".
No commercial partner was named in the release.
The facility will produce renewable diesel from bio-based feedstocks such as animal fat, soybean oil and corn oil.
The company said the decision signals Marathon’s strong commitment to producing a substantial level of lower carbon-intensity fuels in California.
“Converting the Martinez refinery to a renewable fuels facility is an important addition to our growing portfolio of renewables projects and aligns with our strategic priorities of strengthening the competitive position of our assets, implementing commercial strategy changes and strategically deploying our capital,” said President and CEO Michael J. Hennigan.
Engineering work is under way and the company has applied for relevant permits, Marathon said in the release.
Renewable diesel has a significantly lower carbon footprint than petroleum diesel.
Marathon estimates its conversion of the Martinez facility from petroleum refining to renewable diesel production will reduce the facility’s manufacturing greenhouse gas emissions by 60%, total criteria air pollutants by 70% and water use by 1 billion gallons every year.
Click here to view the ICIS Coronavirus, oil price crash - impact on chemicals topic page.