Top 3 Takeaways from American Fuel and Petrochemical Manufacturers (AFPM) Summit 2025
Number 3: 300 First Time Attendees!
The halls were buzzing with 30-somethings (and some even younger delegates), 300 of whom were first time attendees. Many of them served as presenters and panelists while their graying mentors roamed around the rooms with microphones (Phil Donahue style), fielding questions from large audiences which included the panel members’ counterparts from other companies, their suppliers, and all the other graybeards.
This new generation of leaders wisely chose engineering and/or the energy sector to express their capabilities — they will find their chosen field rich with opportunities for those who continue working hard, learning and staying engaged.
Number 2: Improved Renewable Diesel Reliability and Cycle Life
Renewable diesel producers continue to grapple with the challenges of processing renewable feedstocks in hydroprocessing units. The challenges are mostly familiar to the industry but rise to a new level with these bio-feedstocks.
Hydroprocessing of biofuels involves different reactions, generates different products, and causes different reactor heat release patterns. Impurities in animal fats plug up filters and reactors. Phosphorous in cooking oils and greases poison hydrotreating catalysts. Chlorides in used cooking oil accelerate corrosion. These pose new risks for operational incidents and unplanned downtime.
Fortunately, our industry is equipped with well-developed diagnostic and analytical methods to identify and mitigate such problems — and refining companies are showing a more open attitude toward shared learning at the industry level, especially on things affecting safety and reliability. Renewable diesel cycle lives (between catalyst changes) are starting to be measured in years instead of months, indicating improved reliability and lower operating cost.
U.S. octane production bottlenecks continue to surface
Though not a headline item, the U.S. has been short on octane production capacity since 2022, largely because of the full implementation of the Tier 3 10-ppm sulfur gasoline specification which causes octane destruction in a way that makes itself more evident every year.
In 2022 and 2023, Tier 3 octane destruction caused five-fold spikes in wholesale prices of high-octane blend stocks and Tier 3 gasoline sulfur credits.
Since then, it’s been driving rising import volumes of expensive high-octane gasoline blendstocks and continuous increase in benzene credit prices.
The octane shortage is responsible for low gasoline margin capture rates that have plagued some refiners’ financial results in recent years, and has increased retail gasoline pump prices.
This year’s Summit provided more evidence on this front — there is more talk about investment in increased alkylate production (alkylate is a high-octane gasoline blendstock). Such talk had not been fashionable before — in fact, I have often heard that “no one with half a brain would consider investing capital in gasoline which is a product of the past”.
But refiners and other players in the octane market should know that capital investment is not the only way to address the pain of summertime octane bottlenecks. There are better, faster ways, including non-intuitive sulfur credit and benzene credit trading strategies that recognize and exploit a producers’ competitive position, whatever that may be. Some of these can be implemented immediately with no up-front cost, and have a track record of lucrative results for those who employ them.
It will probably take many more years before the octane shortage is addressed properly at the industry level. Meanwhile, the more aware and agile octane players will continue to enjoy a big competitive advantage.
Recommendation
Every refining executive should have a comprehensive understanding of the technical, regulatory, and economic aspects of Tier 3 gasoline, the octane market the sulfur credit and benzene credit programs and how they affect your business. Those wanting a quick education on the Tier 3 issue should get the short book, Gasoline Desulfurization for Tier 3 Compliance, which will make you an industry expert in a day.
Once you have become expertly informed of the problem, you can save your team years of redundant work by buying Hoekstra Research Report 8. We are the ones who saw this situation coming, did the research and field tests, ran the simulations and analyzed the results so you and your team can take immediate steps to increase gasoline margin capture in the Tier 3 world.
Our reports include competitive catalyst testing, pilot plant and commercial field test data, full detail of credit pricing and credit bank status, spreadsheet models to help improve gasoline optimization, credit strategy and refining margin capture in the Tier 3 world.
Don’t get caught panic buying after the credits spike.
George Hoekstra
George.hoekstra@hoekstratrading.com
+1 630 330-8159
