RE:What is the Real Cost of Producing Renewable Diesel?Hi TVR.
I don't read the Q the way you did.
Disclosure I don't own any TWM. I bought mid 50's cents and sold all of it at 32 cents. Took my $7000 or so capital loss.
I have a few minutes to reply so here goes. I listened intently to both calls and my opinion is it is all about LCFS credits and the lack of any buyers in July. Operations at HDRD are going great and they made a nice profit for LCFS-T and TWM-T.
The analysts were miffed at them for not dislosing what TWM is paying per LCFS credit to LCFS-T.
They sold the used cooking oil business because they can just buy it when needed....which they don't at present. They use Canola oil or maybe Soy bean oil and are hedged 50% this year and 30% next year. Both commodities are in the bargain basement.
They want to transfer debt from LCFS-T to TWM by Friday this week to clean up the balance sheet.
There is some concern by the analysts about the LCFS credit market in California IF Trump gets elected and the NDP doesn't win the BC election in October. Personally I am not at all concerned about the elections. The day after the US election CARB will increase the ammount of renewables in fuel. They aim to push the price up to about $175 from $54 right now. It jumped up from $44.
Tidewater is laser focussed on SAF in Canada and is collecting credits now. Also renewable diesel is a worldwide priority.
Imports from NESTE in Singapore are about to dry up due to a 2 month turnaround at the refineries.
The glut is temporary . My opinion and I too am sitting on a capital loss at LCFS-T which may be handy if I ever sell my real estate investments. I am on the same page as the high range analysts.
Good luck but don't short my stuff.