Renewable Energy (REGI) 26 Feb 212020 Q4 Earnings call transcript

Greetings, ladies and gentlemen and welcome to the Renewable Energy Group Fourth Quarter 2020 Earnings Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions] Please note, this conference is being recorded. I'll now like to turn the conference over to our host, Jakob Schwegler, [ph] Senior Analyst, Investor Relations. Sir. you, Thank

begin. You may

Officer, Diego. fourth Good call. welcome you, Robinson. Chief everyone, me Chief our Financial Officer, afternoon, and full our Todd Executive and quarter President conference is to Warner year and today Interim Thank REG's and CJ XXXX With earnings

While normally stepping the reserved today Todd Head Interim assist to of am serving I as Relations. for in is Investor CFO, in the role

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you, Jacob and everyone. Thank good afternoon,

the incredibly of with profitably the challenging and effort RTG was As singularly I our in, most of back unwavering in by results XXXX kept maintained team to difficult results, review years stand and us am maybe proud the The and and experience on we put of uncertain health. our year. careers. focus safety achieved and us an a XXXX one operating any year, volatile team will environment REG disruptive, and adapted efficiently focus the and this

the our results market foster disruption demand Our product believe to operating significant was the values. strength in with the our to XXXX despite keeping to growth, of XXXX the of fuel demonstrated model, performance our team, which our especially driven commitment of in our a trends and and values of act continue a performance our These We flexibility. with feedstock respect core drive operate resiliency face that Together, XXXX of as a future in and strengthens success. through we we that, make Making values with our in continue of underpin naming that because these belief the gave Regularly and values we make will confidence even our them culture decisions our did, pandemic. it through. would would uncertainty to keeping embracing safety, integrity it fear and the humanity. us of

a expansion our energy sustainable bio in an The as by growing leadership element Our goal the the system strategy. the to market. of is achieve based accelerating is achieving goal, diesel maintaining transition planned more mission of this to Geismar important downstream is

now Moving a downstream at and right stronger to More recognized without capture REG enthusiasm and in infrastructure significant means in seems at new and make in the ahead. to building saying both I costly customer for right back is so is public will the or our looking look and is ever the in equipment for the value driving our biodiesel diesel I've as demand for position than diesel. markets biobased grow levels customers premium renewable it and decarbonize investments. been agrees. to future the opportunities forward believe a that I time only now our having place while XXXX,

know certain is point product creating the known was least investigation. level, internal that that our Many tax volume that reported had credits diesel and we gallons biorefinery would for required plant the are had known and address IRS bio the petroleum have to at X.X% at additive BXX.X. XXXX, XXXX we and the in unique fewer reasons when petroleum standard learned of BXX.X Seneca results, realized as as the to BTC for mixture blending credit excise discovery be sold. the as for financial of of otherwise blended of diesel and audits In and XXXX for Before XXXX of was pure sold self including XXXX we restated that diesel our We into not petroleum need gallons with the to X.X% blended results you periodically we diesel to go the a BXXX BTC biodiesel and expected an filings, refinery Seneca launched our I that we preparation system the discovered IRS the than restatement. promptly or the at biodiesel behind want our BXX.X. What Illinois that the

the were some of as sold BXX.X result, a BXXX we gallons actually gallons. As

period blended to credits sold is our totaling pursuant own that claim to signed We properly. and the working with keeping not credits, were claimed is and a that how million assessment, IRS gallons with as BXXX to internal BXX.X gallons from XXXX consumed with appropriate and taxpayer incorrectly with diesel tax issue accordingly, these incorrectly that whether BTC, are some we entities for confident the its then our what but XXXX Therefore, product in consent qualify we in returning claim with entity And BTC. customers eventually by third the is BTC for the the petroleum customers. quarter were the cases, for any gallons the the are and of $XX.X the re-file the to

as segment of call. the recover will Shortly, as during of to provide customers relevant with engaging year Todd $XX.X the details of the possible. by are his much million the We restatement

to let's have done address situation. we what the Now discuss

First, audits. it note that our of plants all US to completed other their is important IRS have successfully

therefore remediation Seneca primary company enhanced overall being efforts Our our is applied assurance on although wide. are approach focused

the Going that forward, takes and we place policies that have required file established properly ensure the following and the BTC. for to controls we additional blending designed

the the redesigned known the that For validate system used has petroleum calculation where all each facility, reinforce diesel to that number our performing load. the filing control prior system matches blended. is to operating to were to existing gallons And the of been petroleum petroleum operator loading proper required is the we work diesel company that limiting the loading additional monthly system further of have to assurances and weekly petroleum we to of required Then reviewing modes readout be to and amount reconfirm enables the system-wide in implemented to the diesel inventory for modes. of blended. is BTC tool we validate now controls to Seneca And functional added to that until are are local be reconciliations volume diesel reconciliations a amount the

disappointed situation in of take matter. and hands full around this responsibility Since it are this decisively have learning for acted it. our and we We

investigation in this to won't Our addition up that incident give processes our be system stepped isolated repeated. us wide confidence assurance

the and and net year Slides fourth $XX and are sold the adjusted million very results net $XXX XXXX highlighted to of we pleased turn as EBITDA Especially report of of year, million now Five. quarter and income million magnitude gallons $XX million with challenges XXX to Let's Four of given fourth the full on million gallons million, full and income sold. $XXX of with XXX year of quarter EBITDA the adjusted

hygiene capabilities. none so of a even As a us importantly XXXX, workplace drives daily the much goal goal a related planning more we In it our ourselves could team the inform became approaches. in important health. And the important face in of supplies remote lot issues, back that creation practices and late when safety our the XXXX, plants. and the for up our work record possibility for proactive included we begin starts January the to was COVID-XX we in offices, activated response and but emergency good Most Zero more value that REG's for is of to disease a values which stepped preparing planning This our a about than our needed Vision evidence worst. us no see matter, or or securing look safety, the efforts either taught that pandemic. and Europe, a of accidents US case includes pandemic, becoming health on with before

we're and to continue employee So, our business when health we COVID-XX ready business operating significant able or without disruption. were hit, essential issues

incident safely of Over record new with monitor we phased COVID our requirement approach occupancy have safety to with guidelines. slide including pre of year, recordable transmissions, Zero. following to had running eight. the pandemic, and use the those on kept CDC a we plants learn than Even the incidents a keeping office we workplace the industry related challenges Vision the COVID course manage In shown lessons to and with are drive learned we to from average total a our maintained better and hard as culture, working rate

shone The despite million proud and stay challenges. downstream progress in and we expansion Along other growth than extremely achieved gallons through value diesel million really kept notable even that XXX X% XXXX additional culture, the production, track and which strategy. representing with results was XX Geismar we production strong I gallons, the of XXXX Geismar oriented that thrive high us renewable to our as organic in more this plant. REG am record focused on in previous growth the substantive of made plan our helped at our our organic

environment. this profitability year highlighted economic the challenged our of resulted the stress of highly strength model. solid despite business of All external in The the

this Slide was the volume and driven on declined blends of Nine increased the margin more sell diesel increased our strategic we both sold volume and We into to sales, gallons. self sales as biodiesel party produced diesel by a third Slide profitable our biodiesel of gallon sales and mix shown XX% renewable activities. by reduced shown Our lower of improve product Meanwhile, on petroleum but decision volume XX. of as biodiesel of

and sales finish. Our the above were fourth shift away EBITDA of year the volume sold performance produced high on came XXXX X% were sold quarter maximize shown Gallon and down of Gallons rounding was fourth strong with to slightly gallons but production unplanned sold were Slide sales up end a to guidance. mix out petroleum quarter continued also X% solid Nine from in profitability. adjusted for REG compared the the

oil see This by was production shown to Notably, year plant in on sales unique of the ranging biodiesel. a as for production to continue fourth the and customers fleet major the reductions operations more a fuel. we REG, XX competitive value ultra swings strong fats and Slide packing mix in as proprietary focus a feedstock element on and tools attractive margins. RD to was up Slide notably right especially XX% shutdowns the in resulting large Our fourth quarter the blends REG's to market. quarter strong our one operations, wide of clean Overall, capability, plants performance that how us at and were of the optimization consumption, offset Slide prior severely were continue the production our gasoline A our all brief volumes, of pandemic has by we advantage. renewable reductions market. of at modified capability to unplanned XX% the during when to and various a is sales up affected These used in footprint to was result on year versus was been both right gallons position rapidly times sales driven renewable broad feedstock selling decline US Germany our linear feedstock caused feedstock which and system up animal significant enabled as cooking feedstock of and run optimization ethanol And prices of of compared in costs as programming, XX. and rates biodiesel diesel also XX% grow to by plan up XX and year. of biodiesel to taking availability December. to rendering more commensurate procurement, shown flexibility. corn broad up XXXX, flexible and the XX. their relative and volatility with biodiesel by shows response, where were shows a With flexibility profitability reduction of contributor meat biodiesel in of in the last in feedstock outage of quarterly back. another. and and produce a which the and producing early Slide cut distillers in was international notably believe dramatically right XX% last scale we feedstock in dramatically COVID At Feedstock quarter compared Geismar oil the critical is restaurant in REG optimize and like advanced given year, diesel end production in in a given

future is up in an fuel become in as demand the was demand last XXXX, now even fuels, for competence and XXXX opportunities clearer our carbon gasoline comes from performance on important Our notably was shown in as and for biobased carbon our it future including acceleration summer not the and that collapsed change a of diesel biobased play held of will acceleration has only role, steady low X% but slide year low solid jet here the in for from spring demand XX. REG's markets. diesel

during pandemic year, expect, might margins challenged. a one As were

by lower both prior For at has upward. spread been the and equivalent XX% drop prices the prices supplies time fuel price feed + the X.XxRIN drop year that oil a huge with petroleum were Recall about period. began driven in year full quarter the followed year HOBO pandemic consumption. the the than crude depressed with same Feedstock in fuels driving the keeping in reduced dramatic

For the RIN but of spread exemptions a fourth regarding XX spreads drop can year, first shows lower the in the half became not view hobo a in of the new prices as increasing be year. to this and small potential Slide realized XX, By for RIN first the two positively enough to to exemptions were stem and administration Slide hobo half react and refinery the a market as small X.X see of under you RINs effect. refinery Uncertainty overall shown tracking the margins. designed. the more the quarter, to to issued plus stabilizing the contributed the force the EPA significantly began the closely in of

Slide as to in Though and + diversified well mechanisms tailwinds price the significant we are for RIN important in industry fourth the drop. feedstock California as renewable the quarter, the continued drive in during Columbia, and related never ongoing Union. have the X.XxRIN how It's become we energy while to LCFS to see Oregon, by pulling the the RIN HOBO note XX have RINs decarbonisation or market just the British for our program, also of inherent we predict HOBO can be ongoing continue those Norway but European You we encouraged movements, reviewed. flattening out

from fuel consideration markets, multiple in and We use This fuel US aviation states, market the a that strategy regulatory follow of greater growth and additional next encouraged our fuel Especially the probability we're and continue will a the the given aviation the are marine to next growth sustainable More blend to of strategy fuel LCFS drive activities proprietary will de-volume moving is includes within fuels. cleaner the market gain there trend where our onroad will and are continue domestically the similar front under over other this our backdrop expansion. to see well clean ultra programs on the programs developing and over BDRD both downstream we and as come ramp regulatory growing and in signals clean change markets believe immediately, years. use toward indicating as drive by capture. Clearly decade. sustainable margin Geismar few abroad. of and environment, to step continues to acceptance. Europe, aggressively growth the REG In our momentum encouraged the

clean potential an pursuing this ultra Hunt was Our we're including & and this California in to to strategy. with expanding other contributing growth partnership accelerate factor important Sons acquisitions opportunities

in addition business we BDRD we and percentages the announcing some enable of better including are seeing team optimization strong operations boost to leadership up blend the to our our blends, higher optimization BXXX and accelerating XXXX that alignment strong fosters procurement, efforts, In control growth BD to and a and collaboration customers formed among adoption optimization latter part department newly of key increased commercial among us restructured of to teams. profitability,

that are right people focusing poised We the we deliver confident roles outstanding drivers the on the have right right and to results. in

of I place right than time. REG all at in the a more that is result right As am the ever competent of this,

considerable release in of which in report. ESG of net carbon We recycle without customers emissions their our support for products waste to clean reduction XXXX burning our highlight detail environmentally that circular an X.X we contribution Our switching carbon environmental desire the tons for our metric reduce society's XX significantly more products of friendly XXXX, incurring economy. Slide fuels enable million costs. highlights into will

can years and are ahead. encouraged in contributions the energized potential We by we make the

and performance year detail to XXXX our restatements. some to to as review turn Todd Todd? provide the quarter as the behind the financial fourth will full I well Now for call over the more

Thank good you, CJ and afternoon, everyone.

XXXX, the on XX. I XXXX XXXX recognized retroactively and from to the impacts reports was three my for recognized the The been first XXXX, XXXX results, December the the the XXXX benefit of XXXX. reflected reinstated fourth XX-k have the Monday. Recall will our the There the into XXXX. and of was XXXX in want for XXXX, in XXXX of BTC get XXXX restatement impacts XXXX the for February for XXXX impacts on reflect which quarter today, the we items adjustments in discuss for as XXXX, full the quarter amended quarter well. year release, Slide purposes and Accordingly, then earnings reflected full on fourth year adjusted and on and the first restatement in the XXXX. expect I benefit Before of to and BTC was in the the GAAP BTC certain filed XX XXXX schedules our three and quarters presentation impacts the of financial EBITDA. on be are XXXX statement and comments for the reflects file for XX-k and of in first income XX quarters

from the As is claim is possible million. the IRS BTC the our between through assessment our approximately from The $XX.X $XX.X $XX.X ability to excluding $X the and for to million interest. million $XX.X million, for the The CJ is however, sales. tax mentioned, financials, restatement million $X.X intercompany of million difference made

XXXX, first is quarter of XXXX. related million XXXX government of million the BTC BTC quarter revenue of fourth related $XX.X to of in our incentives reduction and XXXX the diesel the statements the specifically, impact XX.X to Now based biomass the on financial in and XXXX

$X.X was XXXX to million, for quarter, all quarter third XXXX. respectively, and are For in effect the the the million, and since quarterly for BTC amounts first quarter XXXX, related of BTC million second $X.X $X.X

the to due interest statement from assessment. increase on sheet other liabilities the the for gallons were interest impact benefit the the and an of into an is expense The in respective impact interest the increase tax to a is the and the in BTC assessment allocation balance retained tax The adjusted takes EBITDA BXX earnings. periods accrued related income resulting The sold. on when account reduction in impact

and reiterate led analysis that the clarification year for into note would I as mentioned, GAAP results we XX. material, and a the XXXX, to not have detect we issue to requiring XX financial material, information is to restatement of more and XX full specific XXXX the Slide the but thus aggregate statements not XXXX. of quarter XXXX, identified amount presentation amended CJ I QX of the for impact business. an to fourth we for One of year of amount the each and before individual the on this you have XXXX restatement, XX-k the as what with this full and the like pleased on the in and This as financial end will the system. financial based have the controls does restatement that it failure weakness quarter then, XXXX weakness. error to determined for material notice additional are XX Slide XX-K Since and the policies status with in want is mentioned for health the and diesel additive the well While I and our to in year get as established the issue included the on XXXX results year the the adjusted not full fourth included on the address CJ is for in

for With when XXXX we allows to $XXX the gallons believe were results which the respective for XXXX all and benefits the helpful the adjusted comparison. recognized net of reflect benefit, BTC the we benefit XXXX in have of XXXX, the a of million allocation net the to periods quarter sold, BTC fourth

the year. review Now results I step back let's full by the start reviewing quarter and then will fourth and

revenue XX% guidance. XX. with decline reflective prices, gallons Total X% X% decline by versus much LCFS on mostly North nicely. Slide Biodiesel volume Petroleum and offset America This shown significant growth grew strong as adjusted GAAP declined the decline and prices the line being ULSD of gallons of was driven a and down their in on basis sold with slightly down a selling to of HOBO diesel noted, profitable strategic bio our specifically by fourth and higher prices decision based pressured more down X.X result were costs average, RINS monetized Margins as down gallon. of in million. over significantly were BXRIN in an lower spread we plus and ULSD the as up on feedstock more to resulting year RINS sales credits. Europe RINS was in First down shift RINS quarter was XX% year, last prices CJ in $XX also year incentives, by separated were both in increase of

$XX usual loss, $X ULSD yet $XX the SG&A fourth down had significantly million related are freight in and rose risk million, down the million our expenses related BTC Chemical is were of and the down billion to a also XXXX losses in caused were reminder costs they loss out $XX compensation recognized a retroactive by when of reinstatement XXXX by We gallons loss employee of XXXX. period, of in management billion. were management XXXX, not even of higher risk which some the during for XXXX quarter Recall $X management to compares fourth QX prices gallons XXXX, risk the in roughly last the as though million due quarter subsequent delivered. to delivered primarily of $X in realized operating the are the final period pricing risk gains offset of or quarter a that management in versus year. the

of lower still down year pandemic. adjusted above but was to million the $XX over travel All costs our were in, year, addition, In guidance. due EBITDA

as Now, let's full XX. look Slide results at shown the on year

impacted mix. as resiliency our in lower the As was CJ sales Europe's North demonstrated cooking gallon third impacted a sold sold year. biodiesel, there gallon for lower feedstock $X ethanol pricing. $XX North higher used selling down oil down party was million, revenue with gallons gallon were Renewable $XX as modest, were in million prices shifted also better as and in for In explained, diesel million. essentially gallons sold challenging strong, corn year-over-year. biodiesel and Rising gallon we availability. ULSD biodiesel performance intentionally sold were enhancing distillers petroleum these down our and margins environment. driven up focused million saw capture as decline America and $XX XX% biodiesel sold more sold challenges, diesel Considering of on our restaurant by significantly was renewable with diesel prices American gallon we we costs the flat dramatically European to sales Europe oil for production prices. increased growth also lower closures Average Petroleum

shifted we more soybean in to mix attractively in oil. XXXX. oil soybean XX% So priced more our and XXXX used We

feedstock higher from prices. was more usage production evenly higher between increased Our balanced cost and

driver management prices Our gallon. million, up well for increase million average The as or XX%. management, down This offset was risk in million main feedstock were $XXX is from decrease $XX LCFS $XXX from by as by million increase from the HOBO was adjusted XXXX. EBITDA plus which separated The year was $X.XX a lower Full $XX a of generated margin this year X.X the compression. RIN margin and credits. average a by compression was spread RIN risk

driven experienced also European by price. biodiesel and stronger volume We margins

were costs million. $XX down freight chemical operating and Additionally,

Finally, adjusted as redirect trailing most provided an capital. to to we the months from on uplift. Slide mix XX XX shows product sales EBITDA return our trailing our shows profitable markets XX invested strategy XXXX benefited and XX versus Slide months

threshold internal to ROIC we XX%. As of you our can exceed see, continue

did expense, less future. XXXX, a to we going continue our for expect however the foreseeable forward, to be than recognize X% For we small tax rate tax

and to be average than low X%. is less Our continues rate interest blended

balance turn to let's the XX. on as Now shown Slide sheet

marketable in inclusive strong. Our remains term the securities. cash $XXX balance and we sheet of portion over marketable securities, At of end had the year, of million the long

allocate for time in the purchases. of We cash when allocation point capital first mostly used price capital was settle million our million to of at the to year some in a we principal, terms much bond In the half $XX year, stock $XX convertible of lower. of did

We paid quarter. also the down some debt first in term

Additionally, keeping framework. our with we capital CapEx in allocation $XX million invested in

options end, was for X% debt capital at we us expansion. well consider Our financing positions to year total which as ratio

all As environment, combined also safe reliability any consider keeping on or always, payback. an return asset capital payback our has $XX CapEx Geismar Major budget non-major high as our approximately budgeted $XX we X.X a and approvals. market million while and subject and and focused is future We that capital less a biorefinery carefully Approximately decisions. we reliable, projects. safety, projects. balanced engineering million our to expansion Included make conditions as approximately the and approach deliver allocation both the strategic on return been in separate for growth M&A will for XXXX acceptable rapid through providing year use options than for integrity projects million $XX board such for projects capital or should projects overall

threshold internal Overall, IRR. ROIC a safety including remains our target XX%. projects growth and investments greater and than remains Our at reliability XX% for

the I’ll outlook, discuss back Now CJ to turn call the to CJ?

Thanks, guidance XXXX quarter first as general outlook for a Todd. as the I’ll now discuss well ahead. year our

touch in of so forget like a the this. that depth. for the seeing long, it the I'd easy For to lives has it's context, on been pandemic reflect and in we're to we’re part Because external still environment bit our more markets

that recently and chain the in end COVID The In supply way that availability and impacting lockdown went related impacting into ongoing at of significant activity XXXX are until market. fact, California remained shutdowns and back feedstock disruptions prices. economic

that for first there's are particularly many temporarily weather Continent Central traders and that a trading environment but biodiesel effectively RIN things tough in even possible quarter. been We’re which as buyers RIN Having and our manage all recovery us pick-up within in demand normal we’re the there. said happening do activity drop conditions. confident set not reduced located, a profitably implemented REG as that, tools still and Cold operate in where significant in to across it return see projecting should has let Houston, of has under once a the Texas,

currently plant quarter our of where annual First of advantage have of diesel our taking biodiesel first to we're the This quarter will first impact turnaround downtime Geismar the year. relatively but undertake an production, period the all, strengthen will at on annual maintenance for and renewable low several plants is the of underway. at margin coming necessary

a will a quarters, shown variety With of in inventory be the to on estimate Slide for to future numbers XX. million. quarter let's be monetized we're as value we the of the that approximately quarter context, note to that want I end significant reasons, of Secondly, RINs at in that get $XX the building

we’re full-year, excess XXX of million through in million, to demand to gallons we'll range the gallons million to XXX the we gallons. targeting million fulfill the and expect For sold produce third-party XXX XXX

For in in first sold and $XX to XXX quarter, gallons the million $XX we of of million. adjusted the range million the to million range XXX expect EBITDA

ULSD or the recognition. Credit are RINs the to volatility end Shipment Of course, any the that February revenue could actual risk this LCFS level of XX of million timing $XX an timing values of includes prices, XXXX. margins, could also market as loss Note first affect guidance a management through results. changes affect quarter quarter of

pursue our us long-term Our as to strong performance renewable return in with diesel gives capitalize the in the economic outsized downstream. growth face strategy near-term we positioned conditions We we're unprecedented as well combined of on tactical in things growth to confidence normal. believe

have led tailwinds headwinds, reiterate Finally, movement right there continues right The to and a that we and the is REG we opportunities and are regulatory carbon consumers ready has support at place are provides products increased renewable demand to that time. convinced to the fuel fuels which that the scale. reduction clean. want I’m more of that the grow in unable than demanding though for needs increasing interest This our societal to these the only on front, for meet I ever, at ever rising in provide are near-term growth. grassroots demand to

segment Now question-and-answer call the for to I'd over our to of Diego? turn like call, operator our the

question-and-answer comes gentlemen, and we’ll [Operator time conduct our this Craig at session. Ladies ROTH with question first Partners. Our Instructions] question. your from Please you. state Thank Irwin Capital

that to taking means I probably maybe things? short-term more make? [indiscernible] to need Good for need have adjustments are Does the points have evening, we'll and CJ, you're like about in or if these something at of jive debt guidance that line to timing major of thing we and we we we looking there way questions. little turnaround, guessing to build is, going $X my EBITDA million $XX walk other a this ask through the a consensus the timing wanted with is issues, I'm could XX-day million bit, XX thanks hit, first to for that some Are XX if the volatility thinking with sort look EBITDA, pieces to any have didn't year. at, in causing Geismar

Hey, Craig, nice to hear from you.

say, some number shutdown. change units to work, And ways. this in which for turnaround XX-day first addition we're in help would the It's the in doing is different significant our turnaround. will out, thing a strengthen capital mind normal a catalyst to of I is keep Geismar So just

work the do. excited about work the we're the that down brought last going peak we some right we're So to at early pandemic. did defer might that of of year, you part we because remember the turnaround And

So able be to is for been important things this out an then we've stretch year, to and an extra turnaround. going

additional the the first in a longer turnaround. have we then is downtime, what quarter of little cost bit the So and

So the margins narrow you it's quarter, and But forward of in subsequent some fully look first then the a recovering we need to good quarters. keep that in first given quarter. to for trade-off. mind more And

Thanks for that color. additional

concerns it's support clean Everybody don't We there's So with support your new several Can because out regulators, chatter lower long-term are to been so that subject, their questions about have there's footprint. of on likes congressional look reinstatement, maybe BTC long-term so a there growing bipartisan industry? update for end Fuels, pretty beyond encouraging for the BTC and that a in important clean the potential actually the and Clean conversations years, air. what to for you us can some out across ‘XX. likes right, air we given worry about the board. Fuels representatives, and now Everybody Clean carbon get our our

government conversation. But and earlier it So it's desire vibrant a there's in of you're is order different not of multiple from just the comments, part certainly decarbonize isn't the this much and establish focused tell but only the one jurisdictions. very Craig, exactly one. can incentives from And as anymore, that to targets, targets early meet I mood, in terms bipartisan my in space to get what federal I right, days but for for thing any those to U.S. BTC indicated the support you and tremendous specific getting on you're in

up So we many groundswell in different quite showing increased demand have a corners. of

like would at packages or the process go nice And very yet. for to already large I looking for green we support you then option I've have Harbor How expansions land side would been permits would that for through air three watching the look that to you that expansion other, ideal plants, may, question, I if government years, both Great. these, have REGI the been of with for something are But investor tax in have the a not locations see last see an Seneca, the potentially two potentially there. these to at Seneca additional and Harbor commit things you'd may or some allow one plants What an from forward announced? third-party as many you for move at Grays both diesel for that to this? you decision on a lands or place versus to expansion need we are Geismar Grays be facilities

the definitely are factors the project multiple we continuing next share start, for your into that enthusiasm frontier. take there and account. on to work we And To next

there. factors the project, multiple be for that account. like advantaged, when that, taking we And has that together want to definitely that's we're there's strategically our an that doing approach actually next While location we've a it linear we call program out winning put something we way, take announcements we’re particularly multiple into to that

do access different for plant to wide an variety a a And economic of feedstocks definitely to markets a to access of multiple advantage some advantage that location enable provide have for you want variety things and wide to RD environment. operation of the are in enable strategic geographical and because optimization logistics both

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incentives real other actually, be for changer. said, game also permitting And you government As challenges changer can reason. a be game the a can

as get realized might done what multiple savings to factors environment understands are be that that disposed one other other positively is whatever a it available are timely there including in utilities, a basis So in permitting And the of needs quite and order well advantage takes types critical. plants as accommodate including logistics. to

So some looking of we’re all exciting continuing that we at things. to do have options very we're And work. those

space. this you And watch posted. we’ll So keep

quarter Great, Thanks. the XXXX. and we this to forward congrats results look strong on past exciting an

Craig. Thank you,

question. from comes Gupta Please question state next Manav Credit with Our Suisse. your

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been program fuels. volumes low definitely carbon RFS significant that's of Manav. our Thanks, is through pulling The a

the the pulling. years, around was important in demand that very has because it It particularly it's a challenges, uncertainties So program. its four all the last actual had of

greater market RINs certainty not, is they around are which So prices into place energy there as go public there sometimes on for timely we if there's seeing it’s that transition. would is is refinery is right basis. that to seeing that exemptions the And small announced whether volume drive that, a spread. now, renewable where with RIN groundswell or uncertainty both we're the But obligation, a support the that to we now, need mentioned be coming of the a very thing time. helping a where well with total as granted from long hobo as the to helping of just And legislators is been getting we've on a in great you're out of with earlier, for or as quite the balance actual kind uncertain. period live The had a

So that question? answers your

simple? you you, renewable is producers. become and of overnight, I'm diesel understand trying coming lot And why a it does of never and it second facilities, pressure long-time. involved you can business they because in are actually renewable that Yes, they in cleaning that this run from to don't maths definitely. have and this been people on Why restart got biodiesel, it simple one like some for is, is, into There's sector a that. we hydrocracker actually of diesel. somewhere not My have can And reasons restarted the we a renewable more goes suddenly who producing have and it shut science diesel have it’s is have about can one lot never be they that a not hydrocracker, which out kind question highlighted there sitting seen were the

So could comment that. if on you

is absolutely analogies There some of hydroprocessing. challenge. good and similarities a to are lot There

on refined some and to of cautious. as the operator oil. process. in the systems so of and need are they’re our hydroprocessing harder to see space units cost intensity, However, than Refined you oil carbon in for do more relatively they much harder with different to these lower vegetable feedstocks new some does have be is are others. problems even diesel, starting challenging specifications convert, to process simple the and get But we an to more feeds, them renewable even challenging lower quality And vegetable

the do So I and create good that building. to think type flexibility will of to the ones, those other that realize don't the issues. over have definitely be take in see our there as biggest the as over you they’re pre-treatment But are types any will challenges able they to that in going are fleet. different with do of plant of RD well the feedstock it requirements be some that I differences contemplate insurmountable. experience operators plants netbacks understanding time really believe And built-up absolutely feed time we've even probably from order the a some construction Those does of of in

clean starting-up. this produce to aren't facilities biodiesel they many that time lower investments be we Again, But not one standards. your just foreseeable fuels. the last And there over Canada ahead fuel with because there renewable market, even built carbon of is or want over one Is the move being there could are diesel. sort seen which have

a Canada market? new So is the at, market this you could look

Well, Canada we already in quite work a bit. actually

interest. an additional of they’re where would currently like believe quite market they're do over significantly tremendous actively an they give expanding start-up portion. the us opportunity And program. in XXXX. have just the We have couple contemplating ramping-up would overall some British Canada customers have envisioned carbon very a it's which I of tax, program, talking years. good LCFS parts Columbia, in And of does this LCFS as in about country other Western very which country-wide a And the besides next

for my you questions. Thank taking

Thanks, Manav.

Simmons from state comes Energy, question please with Todd Ryan your next Our question.

you how expansion, should items? long what is schedule? Great, be can things trying for required? the lead timeline and think handle anticipate When thanks. Maybe what timing talk about our What's project permits assuming for on them? should we should a steps keeping the of on just I get progressing the ordering mean construction commencing the about on expect to you we along do Geismar the eyes Geismar expansion. time we of are When open

longest of Actually, Hi, Ryan, lead items, our capital very good the process. some we've questions. order started actually for

sometime investment final things have underway. And expect the next decision well months. So within couple to are we

bit So schedule. we plan that where of to this there kind specific well once is have be better From construction sense as we'll that, watch a you of very little And is and be space. specific of plan watching a on projects at able we'll a schedule will apply lay well. there you standpoint, give that permitting a everything your periods normal out milestones

very with our in partners and with we're the Louisiana. So, location pleased

in about to flat we commentary there? think volumes the course your a of deal thoughts Maybe in in wasn't the previously results, partners see of the announced And XQ always surprise quarter, how over discussions on Any you quarter. on of How Great, the blends third on pace impression of flat growth have was in there? those increase you versus slide renewable diesel, your presentation under blended are were there with XXXX? sales that then the reflected effectively the kind additional was on penetration of biodiesel the should to driver versus the I third going there the with thanks. little Hunt fully

Todd. thanks question. This Ryan. Yes, Good is

ramped-up So on stay impacted at been yes, we’re the California our obviously, Ultra has recent of orders. And kind focused Clean very opportunity we're there. the about home branded excited by product.

even So looking further demand as the from for Hunt what than would acquisitions. that agreements bit mentioned, further great to agreement & doing branding do relationship. & But is either have CJ a expected. and to little and similar Sons the potentially we And seen further opportunities slower or have uptake Hunt we we're Sons

tuned something in, happen space. to So looking be in stay for that

a of feedstocks? relative start-up kinds to CI just them. concern in little competitiveness of as more if talk feedstocks, those. in percentage competition positioning the right this. you questions years one the Maybe, biodiesel relative sure a increasing you could as as in I'm a and biodiesel always additional well. your mean, bit for to There's do whole about producer thanks. get you I see squeeze lot how Great, coming view on your be, this, side access attracting time for and plants of can on of might your because right a get We I biodiesel But terms mean, the we increasing typical for kind the you of about system, you I you run economics about competition going low across mean quite of high your think lot feedstocks, forward. I a you

advantage good have there's to you capabilities, plant the game the an much. depending with feeds An advantage biodiesel markets. the a this geographic different location. reason big emphasizing the quite access why as and game really the optimization outlet Yes, It's they optimization and their as name well on our plants geographical its don't to of And logistics that is part its that of have the is here. so international of is the localized I'm some of really play processing many have more to of some location for

an built important order to to larger reasonable to more in biodiesel, access because on plant, keep be which RD scale, backup rely thing So to variety to net to it in of that's biodiesel tends a economies therefore really have wide mind, comes sourced have smaller and scale an has plants of particularly than the when feeds. internationally a

So there. optimization be game There's keep to in an that played mind.

when access, encouragement and because us slice now us grow which of feedstocks, future our to And industry of term puzzled like they has both you long different in reliability of lot there's medium as are XX grown of feedstock pies wouldn't folks feedstock to the give were whole when gives say of about it our looking oil standing bit some of pie. excitement types started novel one when and and this to things a availability. a baking point introduced. isn't working access our to the years, they're about on Then about a comes grew which the to me other over from be soybean it last actually we're and Some at variety ability to as long-term just as and It's industry's feedstock assurance it is, that cutting inception, more whole I quite does that up just and and that in the existing its their considered well were the when ability relationships, have on grow otherwise. near-term, really concept really things local it staples I

oil, experimenting a with oils. we're and cooking wide plant now grease, we oil, distillers and including use types corn fats added and other variety we added things, and we So trap of use of

there of long-term near, really for and growth and both a there's there's So sort of exciting lot out a world medium opportunity in feedstock.

Thanks, right, CJ. All

Levy, Jordan question state is Securities. comes Truist line your your next open. from Levy question. Jordan with Our Please

please muted, yourself have yourself. may You mute

Okay, on next we're the going to question. to move

Hello.

doing? you are How

start on Todd. to All of this it getting just M&A. Hey in made in Wanted prepared by thoughts your out on right, potential CJ, your touched kind time. you Todd, remarks.

desire to Downstream or previously have the means. grow both the segment discussed of a through different Midstream, guys marketing couple You

of I kind question, you there's then follow-up in of markets, the like thinking And at a see think on how in facilities, progression so as any kind same established been cover of vertically first kind for more get of your be of thoughts I on your that on if markets, model, wanted your about crops some things a or And once that. emerging and like whether it feedstock integrated front. to the more least some

of So your of on get potential kind just sort thoughts wanted of to those either options?

definitely focused within inorganically. our both well we're Jordan, to Downstream grow to continue organically strategy, very Hey, on and opportunities

different very have some exciting potentials, I our space definitely the able So somewhat commercially good interesting is there. watch some feedstock, There's to with hope expand new we be you a would actually we're we feed it to this comes this at focus. end portfolio that ways and also types potential we of on prospects announce a can to year. near-term of of as by use Much of feeds. say sensitive going of lot area, sources When of imagine. to that's it have And our within looking

So those we for of I strategically, can don't in are posted keep both areas but high talk and about you focus we’ll us. you the assure specifics,

you're markets, just the progress in on of program? seeing be in different earlier And color. other progress international or potential just you're an emerging wanted That's to then Great. type to I great your Canada, kind toward get any question on LCFS markets, it incentivized follow-up thoughts Manav’s States seeing about whether

has getting a and in State, the an program the now about closer nearest-term hearing talking finish probably we're about the been across your keep coming who eye think it's positive progress win Washington year. line. place to time, jurisdiction taking for some long very closer I feedback on LCFS that progressively like to And is this and

Actually, applications. is have LCFS be incentivize the they in about to do existing And pointed very just draws they're New I'm with fuel watch talk whole going because what potential that about decarbonization these an EU sustainable is space closely. that they're sustainable how where continues the out, Mexico I it's I types Canada II, finding system. the the is, as and that actually make which really also RED very determine watch but of the we way types very of not programs, but aviation to of aviation across to are would you fuel, think I hard starting program, while to most a to think trying And interesting. to products closely So about that think the important to spaces think talking about a

So aviation is space important a and marine as well. is very

I there opportunities exciting to continue near-term. there's extremely marine their some having think world to decarbonize. views and And encouraging desire into the the some in We’re very

Great, so that. my covered follow-up CJ. be was going to you about, much, Thanks

Thank you.

Our next Wainwright, question your comes H.C. question. from Amit Dayal please state with

you. then appreciate these for increase questions. in economy numbers, if to flat guys, With some opens the outlook, in Thank produced the small taking XXXX Hi, CJ, upside to a roughly Could you up gallons that there the and I gallons be sold. et respect range, cetera?

growing portfolio. gallons. on is growth focus economy faster, existing easy an for sold the the where world place the organic rapidly to in with us in gallons continue to Definitely grow is course, third-party And of we

we this were mix you improvement what of a that was a bit So year undertaking. saw I think

the is may we little what selling we to selling margin as total of we gallons. number those more underneath But were volume, margin the gallons, number and petroleum in this and than if same but a our focus Todd be biodiesel of and renewable look to gallons. gallons, different you're hood at than described So increase did. blending our seeing are you biodiesel but much the is on petroleum premium I that more diesel, diesel, blending same the And into trying selling with detail of

of to blends. and of get the closer customer, higher in as biodiesel particular, the more level So we're selling we

blending with a blend that interested even that before an level a higher customers all diesel petroleum started Every we haven't I sale XX% purchasing and the distribution where biodiesel think we're like been you with time we are example at given business we've in relatively gallons. rapidly number our other same selling blends. of less have make that, but diesel and more actually biodiesel customers

have is hood change adding the to quite total a portfolio. going you our So number of underneath on, of of gallons, bit which the value

for QX, then price feedstock really And on feedstock in are trends color in or QX that be so you, any was to helpful? far that would for you helpful. prices was Thank that, rise seeing you stability any continuing

give very actually, for of creating everyone very the We might a any get pricing. the year’s long are the right a that's as crystal we're inventory have clear that significant ball very growing volatility soybean bit would quite actually say in season, be. soybean what can oil of prices. as spike we I roil. continues think don't We confidence to this actually a feedstock, this I world as pretty in minute oil the pandemic is low. to what this probably level week oil, to of the very, is situation inventories now need say in in different And the to market hearing in news just through that soybean

So entering interesting period. fairly we're probably a volatile and into

dynamic. would As experienced. onto oil are starts we of have now the of market. time, supply the create the coming are But up, market And on new and pricing that be right cooking normally terms both that's more some used supply oil at and in those some going open same feeds the distillers to coming market interesting constrained to remember more versus what corn will be there

us space be to interesting an all watch. it'll So for

just inventory if finished or in then Todd, is the share feedstock is what mostly right is your it the it now, and product? Okay, now? in you Or inventory can mix right

a it's combination of first both kind speaking the a it's of Amit because in and we're Yes, a generally seasonally, building period. inventory so slow quarter,

we've So year first running in we're we build got it's would rest quarter finished, finished than yes, hard. of the when inventory and the warmer the throughout more

claim which the million timeline is last back, take respect you to one with there just potentially the place? Okay, this could restatement, within could question a $XX.X that

Yes, Amit, a good question.

the need to we've get will with dollar So, it's work that it's really pay dollars But, tell to every hard a we to we customers IRS, we've, back. to dollar. recoverable the our

customer by And individual customer an so analysis. of kind it's

a if on really aggressively So certainly I to to give we're working a dollar But don't can. out every timeline. we want go limb you recapture and

all That's have. you. thank Okay, I

you. Thank

comes Our Please with Wasikowski your question. Greg Research. question state from Webber next

in. Todd, good the for have Most and ones thanks out. CJ, me taken Hey, of been squeezing

just throw out. a quick couple I’ll ones So

on thinking I comparing ton XXXX? there's little bit, be with out how expectations. given unknowns, now, lower to for of color enough zoom And just QX bit a that think XXXX you you've know XXXX. do But than if EBITDA right everything EBITDA, at might see but we about the I that outlook little adjusted least why now, right a a

don't or we Hey, economic the bullish we’re tend us to Greg, quarter speaking, recovery with front Well, respect first generally assuming the to know, expect that on EBITDA. as march you of But all forward. in we to the year specifically opine past that continues quarter

And little or would give technologies be the guys on Can digging Okay, enough. geographies you products and color fair especially on then focusing Downstream potential just that a any or deeper M&A specific on? there. maybe expansion you

Yes, Greg, good question.

and a strategic So, into for a in of is want Sons it's kind lot us. California & diesel of playbook, market you of of very the renewable if biodiesel kind keeping move We market. will, to that Hunt with blends

type strategic. can kind most other of blend That's focus we're in for the margin course, uplift. the it's area But we where biodiesel then our diesel part, of it's LCFS really that renewable markets looking So then of and those at for and opportunities. us. get also And

Okay, sounds me. guys. Thanks, it good. That's for

Greg. Thanks,

Thanks, Greg.

comes Please from BWS state with question next Our Hamed question. your Financial. Khorsand

structure? was, happened this to management going last the of first Hi, given given so keep that restatement is are that the now, I operating of had confidence as of aren't And do question things costs what to to year what you kinds what investor kind happen ongoing going these process, middle to again? doing

very your for important one. It's a question, Thanks Hamed.

like some a be intermittent. strong how I think company of really to was on on to The it that in, was was actually identified putting reactions everyone stronger and design systems has have we be we follow-up company this And one-off, our is very of to and Credits. issue, across about engage It's can and seriously strong history already. it types to us And really in assurance. issues. complicated actually at the place a compliance the comes the both excellent it important of it actually the LCFS how very RFS Seneca get when in take to for things situation a it's been, cases been which ones

if So of like give were aware putting that, would we in us place, the confidence become it. something extra there assurance processes that

think understand as but I everywhere, it's as Seneca we passing you very measures, not the important did including investigation well forward. also going wide. to high isolated and assurance audits rather our was with for system these And that now, IRS comprehensive us confidence have being Although to we extra just

supply your highlighting anything chain that question to feedstock? beyond just to able ship outlook, to being my this able in Norway? disruptions is Canada more source being the was you're other Okay, it and just on just Is

to think supply flexibility margins logistics do when I is keep there around. to an is optimization of pre-play chain, things comes it important to thinking in about mind most one and the the because move because game

market, market that access multiple a single going whatever a lot portfolio a going work to dynamic multiple react plant flexibility multiple a margin you’re if a and and realize, at amount the of that it a to that you structure you're to to ship gives is, there multi-plant and to and can So market margin, is a of the you be if have tremendous is from the markets, time single locations able be has dynamic within going and take forward. feedstocks to of

great. Okay, Thank you.

Thank you, Hamed.

Hamed. Thank you,

back that's closing for to Thank it I'll today. you. And the questions remarks. CJ for turn Warner all

events. actually, going about baton Todd, talk And the to the Diego. who's you, I'm upcoming Thank pass to to going investor

Thanks, CJ.

for which a Slide shown March have XX. scheduled few investor on conferences are quite We

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good disconnect. may a parties All you. Thank Have day.