Conor Fitzpatrick

Conor Fitzpatrick asked about the implications of the REMS supply and demand table, specifically regarding significant biomass-based diesel feed imports, and how REMS policy protectionism on the feed side would net out within Darling's U.S. fuel and feed businesses.

Answer

Robert Day (CFO) stated that clarity on how the EPA will treat foreign feedstocks is still pending. He noted that while North America has crop oils, some foreign feedstocks would likely be required to meet the proposed RVO mandate, and the accommodation for this is not yet clear.

Conor Fitzpatrick asked about the implications of REMS policy protectionism on the feed side, particularly concerning significant biomass-based diesel feed imports through 2027, and how this nets out within Darling's U.S. fuel and feed businesses.

Answer

CFO Bob Day stated that the EPA's treatment of foreign feedstocks is still unclear, but some foreign feedstocks will likely be required to meet the mandate. He noted that if foreign feedstocks are penalized (e.g., half a RIN, no PTC), they would come in at a discount to U.S. feedstock prices, which would be constructive for the feed business.

Conor Fitzpatrick from Bank of America Merrill Lynch asked for details on the specific operational improvements driving the consistent reduction in OpEx per gallon in the renewables business and questioned how Calumet views the attractiveness of different regional SAF markets, such as the West Coast, Gulf Coast, and Midwest.

Answer

CEO Todd Borgmann explained that the primary drivers for cost reduction have been significant improvements in water treatment efficiency and a meaningful reduction in on-site third-party contractors as the internal team's expertise has grown. Regarding SAF markets, Borgmann emphasized Calumet's logistical flexibility via the BNSF railway, allowing them to target advantaged markets in the U.S. Midwest (state tax credits), the West Coast (LCFS programs), and Canada, ensuring they can capture maximum value.

Conor Fitzpatrick asked about the specific drivers behind the particularly strong diesel and jet fuel differentials observed recently in the Mid-Con and West Coast regions.

Answer

Chief Commercial Officer Rick Hessling explained that the strength was a result of refiners running sweeter crude slates, which reduces diesel and jet output, combined with strong regional demand. This dynamic has led to expanded octane spreads, particularly in the Mid-Continent.

Conor Fitzpatrick asked if recent UK refinery closures make restarting the idled units at the Paulsboro refinery a more attractive option for PBF Energy.

Answer

President & CEO Matthew Lucey stated that while the company continuously evaluates all options, it has no plans to restart the idled Paulsboro units at the moment. He emphasized that as markets evolve, PBF will look to optimize all assets to create long-term value, but a restart is not currently under active consideration.