CVR Energy receives full board approval for Wynnewood renewable diesel project
CVR Energy Inc. announced Dec. 21 that it has received full approval from the company’s board of directors for its Wynnewood renewable diesel project, which will convert the refinery’s hydrocracker unit for renewable diesel service. Upon completion, which is expected in mid-2021, the Wynnewood refinery in Oklahoma should have the capability to produce nearly 100 MMgy of renewable diesel and more than 6 MMgy of renewable naphtha, significantly reducing its annual renewable identification number (RIN) exposure under the Renewable Fuel Standard.
“We are pleased to report that our board of directors has granted final approval on Phase 1 of our renewable diesel strategy,” said Dave Lamp, CVR Energy’s CEO. “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. 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 blenders tax and California Low Carbon Fuel Standard credits. The project is expected to generate 170 million to 180 million RINs per year.
“Once completed, this project should further enhance our stated goal of reducing our reliance on RIN purchases to comply with the flawed RFS program,” Lamp said. “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.”