Vertex Energy’s renewable diesel output, yield miss 4th-quarter targets
Performance of Vertex Energy’s renewable diesel unit in Mobile, Alabama, missed its mark for the fourth quarter of 2023, according to information the company provided in a Jan. 23 operational update.
Both output and yield for the quarter were lower than expected.
Renewable diesel volume from the unit, which has been operating for less than a year, was below the prior outlook for the fourth quarter.
Vertex’s renewable diesel production for the fourth quarter was 163,800 gallons per day (gpd), just under the forecasted range of 168,000 gpd to 252,000 gpd.
The yield on renewable throughput volumes was approximately 96 percent, slightly below the previously expected range of 97 percent to 98 percent.
Meanwhile, Vertex reported that the company’s feedstock-optimization strategy is progressing as expected.
The company expected to receive California Low Carbon Fuel Standard credits in the fourth quarter for renewable diesel volumes produced in the third and fourth quarters.
The initial LCFS credits reflect a temporary carbon-intensity (CI) score and amounted to $9.5 million in the period.
Vertex said once it receives its provisional CI score, the company anticipates the per-barrel LCFS credits to improve materially over temporary CI values.
The renewable diesel producer expects to receive its provisional CI score in the first or second quarter of this year.
“We opted to improve our liquidity position by further leveraging cash invested in hard assets for the renewable diesel project through our existing term-loan partner, achieving approximately $80 million in liquidity as of Dec. 31,” said Benjamin Cowart, Vertex’s president and CEO.
“As we step into the first quarter of 2024, we’re observing an improvement in crack spreads, combined with increased margin efficiency, which has led us to opportunistically ramp our production rates for conventional fuels and renewable diesel, proactively aligning increased capacity utilization with evolving market conditions,” Cowart added.