Renewable Energy (REGI) 6 Nov 202020 Q3 Earnings call transcript

Greetings and welcome to the Renewable Energy Group Third Quarter 2020 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we’ll conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, November 5, 2020. I would now like to turn the conference over to Mr. Treasurer. Robinson, Todd sir. ahead, Please go

and Thank you, third today welcome our CJ everyone, REG Stone. Officer, Good XXXX earnings afternoon, Warner Officer, quarter Executive me and and Chief conference Financial President Chad to Chief Eric. our call. is With

CJ. a to me call cover I the housekeeping few Let before items turn over

replay on First, I and everyone our later available webcast, beginning webcast the at advance an will remind website at we afternoon. this is section includes appear website call of available to this as would that like accompanying The will regi.com. A Investor our to webcast is will be which Relations prompt automatically slide you. the need but deck, slides manually with the you being

you downloaded in, can our release dialing earnings press website. deck slide along the the of Investor section be in the For Relations of with those

differences. forward-looking discussed risks, are discussion difficult the three. to and the of GAAP statements conference not call Turning some that to to such will of to the like accompanying most Please measures. the non-GAAP of a contain measure. any of These non-GAAP this help core you slide based to that metrics only performance. on appendix forward-looking no are measures this and are slide and could company’s advise assumptions statements. includes release new We undertakes press statements on forward-looking investors information predict contained would these guarantee in factors business. will subsequent uncertainties financial or of reports of for sections from deck the involve on actual reconciliation which XX-Q, the XX-K update of materially expectations. contribute Report in or These Form cause in revised on are operating the factors to statements those and Form or quarterly Factors results with to call Several believe a statements. The performance and other publicly described statements such assess obligation could see those Today’s information as on detail also These Risk SEC. the differ the the forward-looking the date file our our speak We company comparable Annual

XXXX reviews results XXXX will EBITDA provide Let benefit period our me allocation which call The of line fourth sold. he the GAAP when operations, that adjusted were our last reinstatement associated of our by to net of an detail the Chad in put XXXX. Credit, through the Excise financial credit the year, for years in gallons the on BTC, items their reflect to you financial CJ over our our CEO, Biodiesel also results. for reinstated the let in CJ? net XXXX more both the XXXX. benefit and that was at was remind also end XXXX. Tax quarter of quarter, was reflected the With of reflect XXXX retroactively for to XXXX Warner. XXXX or other It that, and and place statements and related the to this and Because retroactive turn me President credit Mixture in

afternoon, you, good Thank everyone. and Todd

our as are results. be things, Day pleased ago, and we we that a are on Day, Investor with as our through Following building with Analyst we other from at expansion Geismar strategy. building At renewable third quarter described Analyst diesel few well planned today our major momentum how a from downstream to plants, event our weeks on among

REG. now in investment Our continues. for feeling to information for this current place our time the that to solutions that of demand believe us fuels all ESG is demand this for continues available right experience demand And leads contributes and clean continues, for and the great right

solid have in and third financial performance the quarter. operational We

As and standpoint, and on while directing are XXX we the performance X. incremental reduced risk continue down to to pandemic. the versus revenue of and a adjusted produced gallons. ongoing and million performance period. Volume million lower change X Year sales primarily date, and million by reduction we decreased due sales energy year on was gallons with considering on last exceeded management shown due EBITDA previous sold due million, we generating slide an to EBITDA. in gains of of to shipment. diesel X. of as gallons, four, diesel adjusted on profit to very million party the over EBITDA result shown performance renewable higher price third timing REG underlying XXX$ vessel EBITDA volatility pleased sales and increased markets. mainly optimize gallons, focusing slide last and $XXX margin million especially X% year most of and midpoint to at XXX for petroleum, to shown by From drivers year, $XX self-produced million Primary produced guidance, the fuel to X of guidance, sold of of from quarter million realized products sold Gallon XXX margin self-produced biodiesel by year a demand profitable strong gallons is gallons, increased slide sold the adjusted during adjusted which overall are due the were Sales

as Our more Norway. in slide seven as ongoing current resulted of slightly, biodiesel market optimize we market, X conditions. our premium sold declined of based million Sales gallons REG being reflected disposition optimization on efforts on the product in sales

industry total closer to of X.X. can On slide significantly Turning X.X. to you and lower see than level to And much we continue average the industry X.XX production, efficiently rate operate of the remain leader safely, our of recordable incident effectively. eight,

mindful workplace zero As we drive how continue our must changes vision may always we affect of of our to and safety safety. stay vigilant incidents,

pre uptick job and conditions. pandemic of a challenges safety see can are you our have taking working the address introduced as of had to steps by communication We incidents the in strong recent related slide

for related job production in environment XQ, in Compared its from the our our volatile renewable quarter our by on remained although Notably, in and in plants. from X essentially flat year direct second year-over-year. shows pressures up was from capacity. guideline disruptions. presented significantly A was during quarter, the margins and over on bio-based production focus disruptions is after resolute demand the was of we and through year Slide safety, well driven relatively versus just hurricanes fuels by production been with in year-over-year. quarter. in with a had Iowa XXXX. last on stable volatile team both managed stable, challenging provided variety existing diesel year It and gasoline has and We XX the the on diesel jet down this for and to economic versus highly biodiesel the But a X% diesel of contrast, while XX% new quarter. to XXXX working to compressed on challenges more fuels than quarter market XXX% Coast several show weather the far benefited determination Along to to and the Gulf fuel QX dynamics a Equally market, only for down year and nameplate disruptions feedstock effect time. stable, already challenges COVID-XX, important return in less shows year X% XXXX. The notable down was second a year petroleum fuel it has To pricing demand X% In COVID the is to year. down that bio-based saw normalcy date, availability XQ. negative date of XXXX sense demand a of XX% on average pandemic demand strong slide get started are of

As our price along prices, also ULSD North average drop declined product selling have mentioned in with America margins average earlier, Accordingly, was quite challenging. per the been price I XX%. gallon following down. in the crude

together, On and in as by as increase moved see the drop on HOBO hand, of decline other it holiday The a offset driven year-over-year decline the induced you after half in stabilized significant COVID Rin have road first traffic airplane increases consumption spread declining there fuel supporting the to soybean XX. Europe, market helped factors quarter although times was prices the Taking has XX% prices environmental HOBO X.X in increasing. as was DX increase. a some those the with slide and the increased down RIN XX% all significant year-over-year, oil vehicles. of can biodiesel the do in mentioned, on ULSD mandates from to with U.S. local we for plus price see

selection quarter supply pricing as options feedstock Although second the relative quarter. in on remained did for relative feedstock improve slide reflected XX, volatile to

strategy significantly mix feedstock our slide as us response, Our feedstock flexible shown to in change on enable XX. year-over-year

area stable for prices environment, feedstock for year. gallon. market costs With for to the Louisiana. ready supportive stability. Geismar advantages demand, pricing and major in us environments the of to including per of which is to increased on slide usage have and In downstream announced fat execute a swings up, the usage us, usage mix hydrogen, enable animal logistics, the our scale, focus to economic facility capacity increased in feedstock with per XX% to decreased oil change Soybean to in XX%; costs With was provided corn XX%; late significant selected production, to XX%; weighted year-over-year. around $X.XX overall economies gallons in our the at diesel is only oil distillers environment, canola our our oil advantage despite balance Summarize of a that XX, intend all accelerate gallons LCFS XXXX in average regulatory excellent the workforce. positioned shows this on we're to environment, Last One be both believe Fuels that as very limit XXX provided Oregon, of increase contrast enabled we it Clean welcome XX expansion decreased us XXX Oregon here a completed a and and tax coupled production its The product strong access we California solely California demand. with support, million including million the LCFS will Geismar, diesel RFSX, community an to foundation performance Program. growth strategies. credit, strong renewable increasing offers our month, Biodiesel renewable end as regulatory add market projected the portfolio programs existing Slide challenging the per we expanding and well planned well usage on there project track we $XXX expansion of year a strategy. to capacity million.

committed downstream continue is closely strategy. all watch focus we A and growth will for we're impact, this shifting as portfolio, decisions locations and at margin and our to resources pursue important we economics As second our to maximizing growth, to our making strategic also opportunities arise. optimize

we enhancement fuels is aim for Our sell. to near-term the generate margin

a us strong positive. with Ultra Hutchinson in the renewable Clean plan partnership in to California as and been XX the it up continues largest Our foothold REG market All reception progress has running initial of country. sales locations in the gives quite fuels are increase and and customer to

REG of the volumes to low grow comes as market Clean to Ultra proposition. appreciate value continue its carbon Speaking clean

grew slide slide XX. are users on and end to XX% and XX last biodiesel also shown grew downstream of a As of renewable quarter XX% year they our as year-over-year. strategy Sales blends versus in element sales on of the diesel key noted

fuels look the from we on environmental quarter place is should right in the understand ahead of that pull societal moving we at our I than opportunities and increase tremendous front believe As back as more today. the push feel Demand are benefits delivering people us, and of third in ever to time. are I regulatory the right

as scale performance now at the momentum X.X decades the slide driven time, the is our our for right a has right ideas commercial available growing emissions to be customers transportation our emissions. our third enables million making alone in tons and behind related a and is the by and at That reducing results produced we of ahead. today REG years equipment full That compromised. difference no and on fuel scale. committed We of to X.X prototypes equivalent carbon the the efforts our years offer shareholders for these best at recent from carbon. several in miles carbon of with passenger our XX, large quarter vehicles, stakeholders vehicle. reduction may In no even substantially shown provide now. billion the applaud that semi costs away contrast, right REG being resulted or reduce electric In and While a customers, fuel we capital solution and planet,

will Chad call I quarter. review turn to Now performance our financial the the over for to third

and Thank good you, afternoon, CJ, everyone.

comparisons. align Before into my I I on on quarter, get want comments the to everyone

and XXXX tax and XXXX. XXXX was biodiesel December last the reinstated As mentioned, Todd retroactively credit then for extended through

third an numbers the such, will mentioned, will the to change the economic BTC vessel comparison renewable results. shows the underlying of diesel of performance. the year-on-year. you understand allow renewable were XX quarter The down non-GAAP diesel third up. due real to Slide allocation better As apples-to-apples of up, analysis to XXXX. sales we down And the timing provide of were Biodiesel quarter sales the margins as shipments, was CJ production but total the adjusted were

value. offsetting increased RIN midpoint brought was Finally, sold across The as we sales except noted, stability pandemic our blending of price of were the modestly. diesel reflects margin lower European and prices, this strategy guidance the much relative were partially volumes the down petroleum Prices of recovering. biodiesel encouraging it to opportunities. quite demand increase significantly at CJ reflects down shifted an biodiesel, higher during reduction in we the our board gallons very which for At diesel

CJ as guidance. when quarter risk approach we that risk million our can larger best designed we the margins make full actual gave management is lock-in management noted, when we cash as were sale. $X Finally, gains our Recall than to

decline. quarter, during management out the management increased balance as job intended, approach the did ULSD resulting in the gains our risk risk And prices As these declined gains. to

Moving quarter, pandemic. as flat more as in XX, due Feedstock prices was and efforts year-over-year, at from fuel let's remains essentially feedback prevalent. XX ship the their oil In response, because on restaurant on is used however, up feedstocks expensive usage. feedstocks. to cooking with production constrained the flexibility around lingering production to adjust certain still to margin, supply feedstocks were feedstock X% we revenue to use closures costs so to and higher in the slide continued world optimization them Notably look

down. For prices oil example, soybean were

our we that significantly. usage So increased

emphasize optimization us. strategy actions incredibly often in flexibility the in these you advantage look action. quarter, we margin see for When we an took you can as the of As types at important our

side, sales price. based production and we the the On highest feedstocks between side, on the directed market supply and to we shifted margin product on

we did impairment initially to diesel Since small that project. needed major without off. able we've quarter, for equipment that planned renewable a XXX we're is equipment the capital was new no a And now an time, written larger capacity production a This organically use expenditures. Geismar our to take plant, we expansion to been gallon playing longer million expansion charge much with increase and production this design for

by increase Now did X% compared profitability SG&A. reinstatement. low biodiesel prior as given accruals on last to a to year year the percentage revenue those of driven not SG&A was X% to accruals. We last tax primarily versus the credit have year. was bonus last The

line, exceeded bottom EBITDA strong Looking at to incremental gains. management ongoing the guidance risk adjusted due and performance our

XX months excess out an trailing adjusted shows economic with this operating pleased trailing considering XX%. environment capital, slide tracked was the XX very we also we and of challenging return on XX XX which To We’re within. invested smooth performance are months months figures. EBITDA trailing volatility, quarterly shows Slide XX

sheet turn shown strategy. let's discuss sheet our The allocation and slide balance Now the XX strong. on remains to balance capital

of marketable We $XXX with have $XXX long-term. in those classified million securities, as million

capital Geismar has Our over have position, and the finalize return list. the expansion. operational as for as at the years. we consider also On convertible with that strong necessary a bond attractive combination reflects net debt a our options top been high Obviously, reduction leverage Slide the opportunities which multi-quarter diesel of financing liquidity capital. financing planned ratio and is have the strategy. the and low Geismar us to compete of cash as program resulted XX position provides option Sharing in deployment repurchases subject, we many that a our a renewable and opportunistically expansion planned is needs we

biodiesel are our delivering fleet optimization returns. Finally, opportunities attractive and

the invested our reminder, projects million. capital third the was return a return expenditure and investment XX% rate the $XX XX% our In an growth capital As and of capital on internal is for overall for for target quarter, project a company.

of $XX remaining we authorization to that We $XX And repurchase now repurchase repurchase. million in following bonds early million have quarter. also convertible use the

Now I'll back turn the to the CJ? CJ outlook. discuss to call

Thanks, Chad.

Turning guidance. the fourth quarter now to

well and pandemic must and the in that a statistics months. dwelling neighbors current formulate With the as to again as the is wave positive it, the are once negative be we mindful forces our our that as COVID winter into market continuing we we both United Keeping looking in possible States, potential Europe, second outlook. in without mind in on account taking

diesel include renewable can continue you on and pricing will situation robust. to with side availability biodiesel inventory attractive white intensity will As will will public the solutions Choice to demand factors for see diesel on positive and improve grease carbon low remain and XX, broad. fuel slide relatively the support cleaner remain potential continue that

be developments depressing while the include oil vegetable putting oil are both corn low are factors crude On downside, and our potential rising to a Both ongoing with margins that under of for prices and diesel those appear prices pressure. distillers’ prices. us

expect above, So million. fourth major XXX COVID-XX. not slide to Note as factored into market disruption also shown that for resurgence in be XX potential on have is of mind, all range in as we XXX sold that we there the of gallon our to quarter a guidance. mentioned a With

$XX million. adjusted the expect of million range We in EBITDA $XX to

XXX the million the we gallons XXX of in million million. range million of sold adjusted in full and to For range XXX year, the in to gallon $XXX of to to expect produced EBITDA range be $XXX the XXX

continue Shipment quarter underlying timing to guidance value that values prices, of and to could on Note this margins recognition. the focus end And the we closing like could optimization, remain the And million LCSF $X.X revenue operator for credit fourth XXXX. of turn or timing of will calls, included RINs, also strategy. We a affect gain. affect of our results. performance, of market of Of Eric. Q&A the I'd optimistic volatility through segment over out to to level implementation and management course, risk the call any shareholder change now quarter actual ULSD our

Thank with you. [Operator Gupta ahead. comes from Instructions] go And of first line Please Manav Credit Suisse. our question the

team. Hey, and Todd CJ,

In to are of restaurants XQ, Just lot back XX. were quickly the slide facilities closed, ethanol referring obviously, closed. a

So you slate. were much heavier soybean running a

a use like looks it way has back has feed corn shrunk Now slate, little. soybean your looking oil a the its better distiller made is and CO into little

XQ, also what situation a towards what's we supply is of of looking look seeing in CI a compression are bit and the lower between and you some these there's feedstocks. little As soybean spread

So would it make we to should how your as -- which move would like think XQ around mix. still soybean, about sense to way relates feedstock

It’s you. differential, just potential as What of but need not Yes. to the to as the optimize Thanks, of feeds. different of CI the is, hear Manav. course, of from each seeing are yield price types good and the well we

system we we pretty a optimization sophisticated So that utilize. have

We a differentials see pretty are I as some on. you of seeing, supply pricing various mentioned, big as do back, going dynamics market return getting there's we're but

choice in to our like the actually the at grease, out as little are continuing is we soybean bit the than white of market active look all But and some procurement time. So a team things well oil heavily more as others.

say away. want that? bit Chad, a months out going add further how the thing’s whole the to to work anything out, you difficult in as to to you it's So look little

you. Thank

we the returning would quarter, said in traditionally that, quarter most like but a second the movement kind third we towards part, quite the and I from think, of saw what for UCO extreme normalcy plants and some back both versus away for emphasize in CJ just a Certainly to available, force No, we I yet. And did not soybean oil little there some reinforced second bit restaurants causing be all come to quarter, online closures then, making tight. that sure. then a more in openings, the after it bit see ethanol saw the

sure. in feedstock day watch So markets for the we're that we still every as

taking question. you for my Thank

Manav. you, Thank

you. Thank

ROTH Partners. Our Capital next of question go line Irwin comes ahead. from with the Please Craig

thanks taking my question. Good evening and for

you and guidance or about expected? range, much How to quarter guidance maybe top how And management, in $XX So the quarter? you to call, performance executed that might of quarter? the pulled came from the factors during guidance there on actually from stronger a EBITDA, $X in much million typical it's congrats bit on see is to factors than out you fourth other And million maybe from having end the delta a risk little in your million look quarter delta that, management? versus risk third EBITDA, price that, nice the $XX of than there. talk at this strength lower the third that been you both we mentioned any then, us the are as other other RINs where really slightly the of compression be feed stock than causing than seasonality Can

million was price was what of guidance I over $X Craig. management quarter. the prices ULSD It throughout of To management for top you the Thanks that us we And coming that, then $XX reducing the the million top reflect in at risk question. for on. and top. operating would guidance, the third say, of gains. that your based a point to risk of performance, end Chad. the and you forecast improved we were give we on And and on the over top. that reflection the good higher and put question $X really of Yes, million with was at operational It's our management, gave The were -- that pushed us was guidance, just the the when we risk RIN quarter, right

that the forecast that when the or think I management all still October levelized risk $X.X that given, performance. date for last measurement But known CJ’s was million section management, strong guidance the of in as of there. risk differential included And we've basically we we've -- was prices. So XX then commodity the in week

And HOBO the XX. quarter, that little you on a tightening So in the other bit we've during seen point, the the improve spread. slide can strengthening did though, of response rims to was see indoor

are getting CJ. this watching for fourth quarter, add margins Craig, we I'll just It is seasonal, it's is closely. tight. pretty but that

behind there see. terms in approach the So pleased to but taking And a for we're our seeing also guidance. margin coming downstream was some management, in beat we're the our third quarter we're through for in that's of yes, of risk expansion which factor the

then a Great. is my question. question big kind of -- big second And picture

financial you plant, no So And one never yeah, do diesel. you before couple for more. of Can they're a you making there's they essential oil for investors idea a for the comes up of you? have an a lot or potentially or bought what see lot there could you have as it that expect pretreatment, that flexibility There's feedstock know, to on online? going somewhere. pick involved us far as on out than renewable if no for as free announcements feedstock part budget plants how makes you REGI CapEx up financing And they companies actually companies debt be move the announcements additional pretreated in you appetite in more there their the buy through that update that Most to actually think maybe Geismar? can out see before of sense the schedule maybe at if can

then help in So, is strategy. opine as we'll let such us start. EBITDA. enabling our And on when our as keep strategy up. Craig, growth. between we do dump comes and focusing to And But us term. steam continuing I'll because will actually Geismar And to that, now a continue nearer start that expanding that, financing great well, And be that's our that's our mind CFO fuel to much going very we're to

assured approach, that's think big options strategic we from I Chad's answers. picture think financing. some great working your And for rest standpoint, our if a about So that

You course, know, million you with in. of $XXX $XXX nearly can the cash, for $XXX really strong see sheet options million, in financing balance balance sheet million invested all are we on considering Craig and,

really cash portfolio. a terms already a a generally have down don't record as, -- historical retention strong expenditure as for project alternatives you well track payment flows we high existing available, generation, generation don't pretty of really cash in capital as with have we of the as financing generally that So nice flow of, well otherwise

big this really in is That from perspective a Of lot a really a attractive of helps the got tax course, a profile. huge more we've not that but cash. that us project, retain call there's

the the queue. on really Congrats And I’ll in Understand. quarter. strong back Great. hop

Craig. Thanks,

Thanks, Craig.

with next line comes Greg Please Wasikowski question ahead. from Research, Webber go of Our the

Hey, good you? are afternoon, everyone. How

Great

are Good. you? How

Doing Thanks considering the well. that with questions. mid then much PXX do that from taking to like late venture left And there? our out? going just and I'm I'm for begin, is what's guys I set How Geismar, benefiting curious to year? timeline? start next guess, construction to to progress you benefit had the that

Yeah.

engineering without able and we were continue progress So our IOCL a to take just to project. it really missing beat that from

enable But progressing completion late that easements we to mid time. that is we're we still on were Engineering accelerated us to everything's OSPL on all to we have to otherwise. [ph], have so exactly largely engineering, and complete only service, we XXXX because we might our were what engineering. knew where by get doing ISPO been to probably a that has year So working schedule some

those you then guys know, over us might materially of of been mean, of the great. you're have Okay, four in or And near-term, and you or guys look But, any, have? that the see kind to kind others, the there three facilities along any the ourselves. tangible milestones, could of that nice logical on processing that to terms I next lines, than the you course years, either at different side specific milestones asked comparable be next or in I construction? like it'd if either extrapolate that for are past, in this regulatory if step give is to but milestones the you anticipate

Yeah.

lead the near-term, of long be I you those placed in order one So, already. And items. think we've actually think can very that would

be that in we than So capital is in engineering gives the next a sense of which investment part year. items early of reflection you final of a actual momentum anything to would of decision, the completion consider of more heavy

that it. So everyone we'll sharing be with we pass as milestone

helpful. time for very Thanks your Okay, everyone. again

you, Greg. Yeah. Thank

you. Thank

Our from Jordan go Please line next Truist. of ahead. question comes the Levy with

Chad. CJ, Afternoon,

wanted Are that lot as Just you lot any and questions of a a peers? feedstock, of from of carbon announced you've knowing different in renewable seeing within there's know moving that get the for aggregator yourselves I low sense market you lot that are as side got gets a development to on that, relates your of market, and diesel on, capacity to seeing pieces that feedstock. it market a

starting for see to either understand not harder the certainly suppliers, so it's simply the feeds et challenging quality the either the we newer just just show that do get what CI differentials market lower to touched are getting or up. entrants, think by or are to different cetera. Well, yet, activity I more into

you're seeing questions. as as little a activity there, bit So of lots well lots of some and

new I value. it'll number might there developing -- of that at it'll And do starting a are think tremendous appear as go. it we be than face is that challenging nuances. But are entrants So realize think more I to it

versus in get then my main there's for if second a three is diesel any sense Great. were renewable last changes just renewable of, Thank this, question market for quarter? you. diesel, end last diesel And buckets hoping there quarter, to

is overall been growing level diesel inclusion renewable interesting the -- which of come Actually that means flat blend demand when biodiesel demand we're what's down, and up. seeing the has pretty blend seeing we're and has even fuel

And as trend will a markets, driven regions. happening in multiple So it by so we're lot the to that well. happening in blend rise. it's seeing It’s think Obviously seeing. biggest continues other California. in in Oregon the LCFS that's We're as I probably that's several that

thanks much. Great, so

Jordan. Thanks,

right. All

you. Thank Okay.

comes question Energy. next Ryan from Please go ahead. line Our with Simmons Todd the of

and a and Thanks. renewable Was the you growth maybe number limiting -- quarter third terms in And next On percentage going the the thoughts diesel. jump Can blends pace how of on the forward? -- of XX of the availability of months Is that XX that to go could broader sales? factor? a where should there? are talked over think nice saw we you XX, slide there in maybe about increase the biodiesel of the driver sequential about

pretty substantial. sort you're of pace. we So, customer that it. is, seeing Henderson noticing is that rate And largely taking our lot it. big to really what good plan thanks for year-on-year getting excited place. are the And about We're of It's about increases And tremendous. enthusiasm continue up we're uptick a the

uptick. So that other and encouraged we're about volume in initial excited deal the plans by very very the mix. We've got

plan So continue I they we'll talking develop. it watch as this And to encourage page. you to about

into the feedstock Sure. follow-up of on Thanks. ones. maybe, turning And one question for earlier the some

well. think Geismar know market are guys expansion, very As we the you there that down about obviously,

to your source of from is and about the aggregation -- ability about here to you think of run. you’ve the you in as obviously there come availability increasingly improving terms market, primarily expansion the low feedstocks sure, feed historically around that you continue feedstocks in any I'm done on feeds of from you've the thought work or this increased US sources the in types do to coming most there? tons from from to of what from the confidence down feedstock international be for As But availability, of different thoughts anticipate expansion. Maybe

already available I the startup. logistics, for think have to us. sourcing enable that we've of see of advantages especially go pretty because starting line site can wonderful do. where right, gives access anywhere And good we attractive options the options existing Sure. to expansion of to And of to and us one we much a sight you're an to Well, water work pretty we expanding to familiarity that we're with got already some XXXX that source were to us that from is going

I the right of from not versus comes feed guess. domestic, waterborne, much now waterborne or How

of any we back take capable one sources. I from quickly. And have is really give it's from we flexibly, that's to you around, time, percentage. we to like of substantial very, a things quarter-to-quarter. at optimize emphasize that, the to in particular It we pretty really, opportunities standpoint, because exact the that can an a a that. pretty times know, get definitely do on international and thinking good just market it of given Well, moving quite moves as put know really we're for been you there some are you moves you there I securing bit weight around But an And that where international

the higher and fees around the domestic because low between arbitrage quite international substantially. between move the some part of as margins the much So CI very and the them is CI arbitrage as of well that fees between

CJ. Thanks

Thank right. All you.

Our next question comes H.C. with Wainwright. Joshi from the line of Sameer ahead. Please go

demand I Thanks. you than travel, you’ve that quarter, you saw U.S.? though. questions commented the on more that increased used are in holidays this But do been level in Europe seeing as like rolled think Thanks expect for answered you during taking for Most of or the people air something my question. -- CJ have macro the

U.S. little a Well, Well, than are different they regulatory U.S. a regime. the just quite different. from

one what So especially very of that's out pointed is things you're seeing, was pricing, we which the the a little of interesting. bit

pool And changing biodiesel the we And their So really good a comes which biodiesel they from pretty over have is of are regulations for as structure that feedstocks, dynamically. a tariff there's there. waste type that strong well. produce

versus produce incentivized internally anything costly that and be there. they material is to can difficult imported, import definitely So quite

of So kind unique it's a market. and special a

of we the levels seeing, definitely the demand where the U.S. between I of a fuel bio-waste up. terms in In blending differential are is that's And diesel mentioned, demand, U.S., down the But the and total demand petroleum. overall, base coming year-on-year. sort as

you. Thank Okay.

quarter A lot between second and quarter. third

a finish lot So off in year better a you shape. starting know, it's to lot the --

earlier that second about I the probably quoted talking instruction you would of have on that numbers the year-to-date in we only been are half demand So quarter.

Europe getting it's saw through better, XXXX. bounced you like So but hasn't back, in it

previous XX, that answer more, that, terms the think seeing are quicker stations, I more demand partially one poured more strategy so Slide that you of just you that downstream nice, are to that planning of to think and planned? than I -- questioners Understood, strategy, just out in push

are. absolutely We

necessarily very by so part exactly of but we're seeing. to explain strategy. downstream work what And our much what we're encouraged continue liberty some to it's in will not extremely at And

my for Thanks question. Okay. taking

you. Thank

line you. Thank Hamed with go [Operator Instructions] the Our of next Please Khorsand BWS ahead. question comes Financial. from

And in competitive are past the away the really timeframe? a markets, could you from you is the premium decline there premium good Hi, quarter? pretty and -- there diverting was that talk reasons sequentially sales markets the just about this seasonally sales

part. It’s overall very thanks, -- know part of optimization. You the Good Hamed. much on observation your

because them feeds think availability if premium between partly you differentially but So absolutely are reward they about of went intensity the differential haywire. and markets premium, for and the carbon margins

as incentivized procure cases better and were did actually a And those not we with other optimize that get back many money net instead able to markets feeds the additional to by it logistics markets. we going the extra and going so spending we -- to in premium of --

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you. Thank Okay.

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with from Irwin next is Craig the Partners. ahead. go Our a ROTH line of Capital question Please follow-up

taking follow-up the question. for Thanks

about there of a European So particularly -- people, investors they is Jet. deep CJ, lot there renewable are asking

of renewable competitors few in emerging? last hasn't know, consider is the Jet makes increasing With jet channel And been take what that’s divert dynamics a Norway, investments lot. Why years? something United you into would this this? you opportunities volumes your kind over sales Can the to flavor of increasing of would talks for Geismar one where, you a out that your RHD, a it discuss focus successful about States? this here volumes to know, maybe renewable there You the different

if Yeah, required in minor because the the proprietary we least your it's market, jet or at substantial investment finishing. not -- emerging, there a from a renewable you're RHD is can produce our process, with wonderful RHD opportunity to process

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players get where And the ones we're than So the pleased to attractive that point more market. it. now, definitely it in to price we're signals to meet monitoring signals see We're really those market be closely. able we'll when the are

Thanks Great. update. for the

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XX. slide into turn Please CJ. Thanks

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