The Energy Transition Is an Oil Refinery Making Renewable Diesel

In a sign of changing times, a U.S. oil refining company is converting one of its plants into a producer of clean fuel. HollyFrontier Corp.’s Cheyenne refinery will stop using crude oil and be repurposed to pump out renewable diesel, which is typically made from soybean oil, recycled cooking oil and animal fats. That’s after processing margins plummeted on the collapse in fuel demand due to Covid-19-related lockdowns. Besides, the old facility’s maintenance costs were “uncompetitive,” and the government is promoting cleaner fuel production.

It’s the latest example of how the traditional fossil fuel industry is changing amid rising calls for the protection of the environment and increased demand for green sources of energy. Cheaper renewable energy projects have already led to decreasing coal output across the U.S., and now — in the wake of oil’s historic crash — some fuel producers are grappling with diminished returns from turning crude into fuel.

“Demand for renewable diesel, as well as other lower carbon fuels, is growing and taking market share based on both consumer preferences and support from substantial federal and state government incentive programs,” Mike Jennings, chief executive officer of HollyFrontier, said in a statement Monday.

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