Ryan M. Todd

Ryan M. Todd sought clarification on the $115 million and $56 million benefits from small refinery exemptions (SREs) and HF Sinclair's view on the future SRE process. He also inquired about Q4 refining margin capture trends.

Answer

Tim Go, CEO, clarified the $115 million as a direct SRE benefit to cost of sales (cumulative prior expenses) and the $56 million as an indirect trading benefit from RINs optimization, expressing confidence in future SREs. Atanas Atanasov, CFO, confirmed the $115 million was cumulative. Steve Ledbetter, EVP of Commercial, and Tim Go, CEO, discussed expectations for Q4, noting flattening backwardation, better roll, strong jet/diesel cracks, and butane blending opportunities.

Ryan M. Todd asked about other potential regulatory uncertainties beyond the RVO and reallocation, such as changes in foreign biofuel import approaches or domestic feedstock treatment (carbon intensity, land use penalties). He also inquired about the functioning of the PTC monetization market, stability of discounts, and ratability of the process.

Answer

Randall Stuewe (CEO) and Robert Day (CFO) highlighted that American agriculture is a key focus in D.C., with discussions around a large RVO and 100% reallocation being the 'easy button.' They noted that PTCs do not encourage foreign feedstocks, and the EPA and U.S. trade are collaborating to manage foreign feedstock rules. On PTC monetization, Robert Day (CFO) and Randall Stuewe (CEO) explained that initial difficulties due to unfamiliarity and unclear tax liabilities have improved, leading to robust demand and confidence in monetizing a majority of 2025 credits ratably through 2026.

Ryan M. Todd asked about other potential risks or positive outcomes from the final RVO ruling beyond the high-level RVO and reallocation, such as changes to foreign biofuel imports or domestic feedstock treatment. He also inquired about the functioning of the PTC monetization market, the stability of discounts, and the ratability of the process.

Answer

CEO Randall Stuewe and CFO Bob Day highlighted that American agriculture is a key focus in D.C., with discussions around a large RVO and 100% reallocation being the 'easy button.' They noted that PTCs disincentivize foreign feedstocks, and the EPA is collaborating with U.S. trade to manage this. Day explained that PTC monetization has improved significantly as counterparties became familiar with the credit and tax liabilities became clearer, making the process more ratable with robust demand.