Phillips 66 Considers Renewable Fuel Upgrades at U.S. Refineries

As part of its broader strategy to reposition itself for a low-carbon future, Phillips 66 has unveiled plans for a trio of renewable fuel initiatives across the United States. These efforts come as the energy major continues to evaluate the long-term future of its Los Angeles refinery, which is slated to close by 2026. Together, these developments signal a significant shift in Phillips 66’s downstream portfolio as it seeks to diversify away from fossil-based fuel production and align with evolving regulatory and market expectations.

Trio of Renewable Projects Under Review

While full details of the three projects are still emerging, Phillips 66 confirmed that they involve both the conversion of existing refining assets and the construction of new facilities designed specifically for renewable fuel production. These projects, currently under early-stage review, could potentially span strategic locations including the Gulf Coast, Midwest, and West Coast regions.

The proposed sites would focus on producing renewable diesel, sustainable aviation fuel (SAF), and renewable naphtha, all derived from feedstocks such as waste oils, fats, and greases. If approved and developed, the projects would significantly boost Phillips 66’s renewable fuel production capacity, helping the company meet rising demand from the transportation and aviation sectors for cleaner alternatives to conventional fossil fuels.

“Expanding our presence in renewable fuels is a key part of our energy transition strategy,” said Mark Lashier, President and CEO of Phillips 66. “These projects reflect our commitment to delivering lower-carbon solutions while leveraging our existing infrastructure and refining expertise.”

Spotlight on the Los Angeles Refinery

In parallel, Phillips 66 is moving forward with plans to cease crude oil processing at its Los Angeles refinery in Wilmington, California, by 2026. The company is currently conducting a detailed assessment of future opportunities for the site, with a focus on redevelopment into a potential renewable fuels hub, hydrogen production center, or green logistics and storage terminal.

Located in one of the world’s most environmentally progressive markets, the LA refinery presents unique opportunities for low-carbon infrastructure development. The state of California offers a favorable regulatory environment, including credits from the Low Carbon Fuel Standard (LCFS), making it an attractive landscape for biofuel investment.

Phillips 66 has emphasized that no final decisions have been made regarding the future of the site, but that multiple pathways are under consideration. “We’re exploring options that support our decarbonization goals and create long-term value for the company and local community,” Lashier added.

A Broader Energy Transition Strategy

These moves come as Phillips 66 accelerates its transformation from a traditional oil refiner into a more diversified energy player. The company has already converted its San Francisco Refinery in Rodeo, California, into one of the world’s largest renewable fuels facilities—known as Rodeo Renewed—which is capable of producing over 800 million gallons per year of renewable diesel, SAF, and other biofuels.

Across its U.S. portfolio, Phillips 66 is also investing in carbon capture, hydrogen infrastructure, and lithium extraction for battery materials, positioning itself to compete in the fast-evolving clean energy landscape.

Industry Context and Future Outlook

Phillips 66’s shift reflects a broader trend across the downstream oil and gas industry, as major players repurpose aging refinery assets and seek to hedge against the decline of fossil fuel demand. Regulatory pressure, investor expectations, and growing demand for renewable fuels from aviation and road transport are driving this transition.

If all three of its proposed U.S. renewable fuel projects are approved and executed, Phillips 66 could emerge as one of North America’s leading producers of next-generation biofuels. Simultaneously, the potential repurposing of its LA refinery site could serve as a model for other refineries nearing the end of their operational life.

As the world edges closer to net-zero targets, Phillips 66’s ongoing efforts underscore how legacy energy companies are rethinking their future—balancing short-term profitability with long-term sustainability.