Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $76.5 million for Q2 2025, with $8.3 million generated from Montana Renewables, indicating strong performance despite a full month turnaround at the Shreveport facility [5][10][28] - Operating costs were reduced by $42 million in the first half of 2025 compared to the same period in 2024, despite a $7 million increase in natural gas and electricity costs [8][24] - Specialty product margins increased to over $66 per barrel, reflecting improved operational efficiency [24][30] Business Line Data and Key Metrics Changes - The Specialty Products and Solutions segment generated $66.8 million of adjusted EBITDA, with sales volume exceeding 20,000 barrels per day for the third consecutive quarter [24][26] - The Performance Brands segment reported $13.5 million in adjusted EBITDA, driven by strong volume growth, particularly in the TruFuel brand [27] - Montana Renewables segment adjusted EBITDA with tax attributes was $16.3 million, up from $8.7 million in the prior year, showcasing resilience in a challenging market [28][29] Market Data and Key Metrics Changes - The renewable diesel industry is currently facing low quarterly index margins, but Montana Renewables managed to generate positive adjusted EBITDA due to its competitive advantages [10][14] - The proposed Renewable Volume Obligation (RVO) for 2026 is expected to increase demand for biomass-based diesel, potentially leading to improved margins [19][20][76] Company Strategy and Development Direction - The company is focused on deleveraging and managing its debt, with a target of reaching $800 million in restricted group debt [22][40] - The MAX SAF 150 project is on track to start in 2026, aiming to produce 120 million to 150 million annual gallons of sustainable aviation fuel (SAF) [12][31] - The company is actively pursuing monetization of production tax credits, with expectations of completing these transactions in the near future [66][91] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for the renewable diesel market, anticipating margin recovery as regulatory clarity improves [73][76] - The company is optimistic about the potential for increased production and improved margins in 2026, contingent on the finalization of the RVO [19][76] Other Important Information - The company has successfully reduced operational costs and improved efficiency, with a focus on water treatment and operational learning [46][48] - The company does not expect tariffs to significantly impact its specialties business due to its U.S.-based manufacturing and supply chain [27] Q&A Session Summary Question: What are the updated thoughts on mid-cycle earnings for renewable diesel? - Management indicated that mid-cycle earnings could return to historical levels of $1.50 to $2.00 per gallon index margin, with potential adjusted EBITDA of $140 million to $150 million at $1.50 margins [35][36] Question: Can you discuss the path to further debt pay down and potential future divestitures? - Management highlighted that they have made significant progress on debt reduction and are considering strategic asset sales as part of their deleveraging strategy [39][40] Question: What types of improvements have driven cost reductions in operations? - Management noted that significant improvements in water treatment and operational efficiency have contributed to reduced costs [46][48] Question: How does the company view the attractiveness of different regions for SAF? - Management emphasized the flexibility to serve various markets, including the Midwest and California, and highlighted the potential for partnerships in Canada [50][54] Question: What is the status of PTC monetization? - Management confirmed that they are in the process of finalizing term sheets for PTCs and expect to complete these transactions soon [66][91]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The passage of the 45Z amendment bill by the US House of Representatives is expected to have a significant impact on the biodiesel and renewable diesel industries, potentially increasing the demand for North American vegetable oil raw materials and supporting the price of CBOT soybean oil [1][2][7] - The restrictions on tax credits for foreign entities may reduce trade volume and overseas raw material demand, while the small refinery exemption policy may have a complex impact on raw material demand in the short and long term [10][18][20] - The future RVO policy in the US is still being determined, and its implementation will affect the total demand for renewable energy, which is also an important factor affecting the price of US soybean oil [17] Summary by Relevant Catalogs 1. Passage of the 45Z Amendment Bill - On May 22, the US House of Representatives passed a reconciliation bill including provisions to update and extend the 45Z clean fuel production tax credit. The bill will now be considered by the Senate [1] 2. Specific Provisions and Their Impacts 2.1 Extension of 45Z Credit - The 45Z credit will be extended to the end of 2031, which is beneficial for the continuous development of the biodiesel and renewable diesel industries and the demand for vegetable oil raw materials [2] 2.2 Raw Material Source Requirement - Raw materials must be produced or grown in the US, Mexico, and Canada, which is expected to increase the demand for North American crops and reduce the import of non - North American raw materials. In 2024, vegetable oil raw materials were mainly from North America, while animal fats and yellow greases still had imports from other regions. The policy may increase the use of canola oil and soybean oil [3][4] 2.3 Adjustment of Greenhouse Gas Emissions Calculation - The adjustment of the life - cycle greenhouse gas emissions calculation to exclude indirect land - use change emissions is expected to lower the carbon emission coefficient of vegetable oils, allowing for more subsidies. For example, the subsidy for producing renewable diesel with soybean oil is estimated to increase from $0.23 per gallon to $0.52 per gallon, which is beneficial for supporting the price of CBOT soybean oil [7] 2.4 Restrictions on Foreign Entities for Tax Credits - Tax credits for specific foreign entities are restricted. If a taxpayer is a specific foreign entity, no credit will be allowed after the enactment date. For entities affected by foreign influence, no credit will be allowed two years after the enactment date. This may reduce the trade volume of US biodiesel and renewable diesel and affect the demand for overseas raw materials [10][11][13] 3. Demand Performance 3.1 Raw Material Demand in 2025 - From January - February 2025, the total consumption of US biodiesel raw materials decreased by 23.9% year - on - year. Among them, vegetable oil consumption decreased by 31.7%, soybean oil consumption decreased by 33.4%, canola oil consumption decreased by 57.6%, and corn oil consumption remained flat [5] 3.2 Trade Volume in 2025 - From January - March 2025, US biodiesel imports decreased by 90% year - on - year, and exports decreased by 46% year - on - year. From January - February 2025, the net import of US renewable diesel became a net export, mainly to European countries, and the import from Singapore decreased by 94% year - on - year [16] 4. Other Policies to Be Concerned 4.1 RVO Policy - The US 2026 and subsequent RVO policies are still being determined. The market's expected range for the biodiesel RVO varies widely, and the price of US soybean oil has been trading on RVO - related themes. The EPA submitted a proposed rule to the White House Office of Management and Budget on May 14, and subsequent policy implementation needs to be monitored [17] 4.2 Small Refinery Exemption Policy - The news of small refinery exemptions is uncertain. If implemented, it may reduce current demand but increase future demand. The 13.6 billion gallons of exemption volume, when allocated to biodiesel at a 30% - 50% ratio, is expected to result in a total raw material demand range of 148 - 246 million tons. If 100% is used for biodiesel - produced RIN substitution, the total raw material demand is 493 million tons [18][19][20]