Earnings Call Transcript - PBF Q3 2025

Operator, Operator

Good day, everyone, and welcome to the PBF Energy Third Quarter 2025 Earnings Conference Call and webcast. Please note, this conference is being recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin.

Colin Murray, Investor Relations

Thank you, Lilly. Good morning, and welcome to today's call. With me today are Matt Lucey, our CEO; Mike Bukowski, our Head of Refining; Joe Marino, our CFO, and several other members of our management team. Copies of today's earnings release and our 10-Q filing, including supplemental information, are available on our website. Before getting started, I'd like to direct your attention to the Safe Harbor statement contained in today's press release. Statements that express the company's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the Safe Harbor provisions under federal securities laws. Consistent with our prior periods, we'll discuss our results excluding special items, which are described in today's press release. Also included in the press release is forward-looking guidance information. For any questions on these items or other follow-up questions, please contact Investor Relations following the call. I'll now turn the call over to Matt Lucey.

Matthew Lucey, CEO

Thanks, Colin. Good morning, everyone, and thank you for joining our call. First, I'd like to welcome and introduce Joe Marino as PBF's new Chief Financial Officer. Many on the call may be familiar with Joe, as he has been with PBF since before our 2012 IPO and has been our Treasurer for the last five years. In the same breath, I'd like to thank Karen Davis for her service, and I'm thrilled to welcome her back to the Board of Directors. I want to address three topics: one, the status of Martinez; two, our third quarter performance; and lastly, the near-term outlook. Regarding Martinez, consistent with our call in July, we are on schedule for a December restart. Maintenance teams are scheduled to turn over the impacted units to operations in early December. As units get handed over, we will commence a deliberate and sequential restart of the affected units. Our plan is to have Martinez fully operational by the end of the year. The dedication of the Martinez team in this effort continues to be exemplary. While PBF's third quarter represented a sequential improvement over the prior few quarters, the real news is the sequential improvement that occurred during the quarter. Unquestionably, there was a shift in September, which represented a significant positive step in the right direction. While product cracks were relatively strong throughout the quarter, crude differentials only began to improve towards the end of the quarter. Now as we sit in what is typically the seasonally weaker period, product cracks are quite strong and crude differentials continue to widen. As we look past the fourth quarter into 2026, refined product supply constraints, coupled with a well-supplied crude market should create a positive theme for domestic and global refining. Global demand continues to outstrip net refining capacity additions, and we expect to see additional capacity rationalizations that will be supportive of tight product balances as we saw this month with the shutdown of another refinery in California. PBF remains focused on controlling the aspects of our business that we can control. We expect to be well positioned to capture favorable market conditions as we move forward. To be successful and enhance value for our investors, we must operate safely, reliably, and responsibly, and we must do it as efficiently as possible. To that end, we are on track with our commitment to our business improvement initiatives. We are working to improve our performance every day. So to summarize, strong product cracks with improving crude dynamics coupled with the full power of our refining system as Martinez should be up by the end of the year, operating with improved efficiency — thanks to our RBI program, all of which should come together to create a dynamic environment for the company and our shareholders. With that, I'll turn it over to Mike.

Michael A. Bukowski, Head of Refining

Thank you, Matt. Good morning, everyone. Before discussing the progress of our Refining Business Improvement Program, or RBI for short, I'll provide a few comments on third quarter operations and our Martinez refinery status. On the West Coast, we continue to progress with the full repair and restart of Martinez. We plan to begin transitioning from maintenance to operations in early December. This time, we will execute a methodical sequence start-up plan with its primary focus being the safe and environmentally sound restart of the repaired processing units. Our Martinez team has completed a tremendous amount of work this year. To give you a little idea as to the scale of this effort, in addition to completing the FCC turnaround, we're installing 130 tons of new steel, laying over 20,000 feet of pipe and over 200,000 feet of electrical and instrument cabling. All major equipment components have arrived on site, and we have completed installation of the two major columns that had to be replaced. I commend our Martinez team for continuing to execute the repair work safely. While the team is focused on restoring operations, we will not let time be a constraint from executing the start-up safely. While there has been a lot of focus on Martinez, our team at Torrance successfully and safely completed the hydrocracker turnaround in the third quarter. At Toledo, a mid-summer hydrocracker unplanned outage and pipeline maintenance impacted third quarter throughput. Aside from a few minor issues, the rest of our system operated reasonably well in the quarter, and we have no major turnaround work for the remainder of the year. Shifting topics to RBI. We are on track to meet our previously announced goal to implement $230 million of annualized run rate savings by the end of 2025. This goal represents $0.50 per barrel or approximately $160 million reduction in operating expenses against our 2024 benchmark and will be fully realized in 2026. In addition, we expect to reduce sustaining capital and turnaround expenditures by $70 million. As you may recall, we started this program with centralized efforts in procurement, capital projects, organizational design, turnarounds, and site efforts at our Torrance and Delaware Valley refineries. As of the third quarter, all refineries are engaged in RBI and are contributing to the savings goals. One of the recent successes achieved through the RBI program is a 5% cost reduction of our Torrance hydrocracker turnaround through our productivity improvement initiative. This program uses dedicated resources to identify and eliminate waste and remove barriers to job productivity. Additionally, we've achieved approximately $21 million in run rate savings by revamping our procurement model to leverage our spend across the refining circuit. System-wide, we are focusing on improving our maintenance efficiency and reinvesting some of the savings in energy reduction projects while also reducing our maintenance backlogs. The outcome will have the dual effect of improved energy efficiency and reliability. We are providing enhanced performance monitoring tools to our employees and incorporating them into our site work processes across the fleet. The new tools and processes will drive the organization to not only maintain our savings performance and efficiency but drive continuous improvement. Our main priority will always be to focus on safe, reliable and responsible operations across our system. RBI will help us improve across all areas and result in a sustainable culture of operational excellence and continuous improvement. With that, I'll now turn the call over to Joe Marino for our financial overview.

Joseph Marino, CFO

Thanks, Mike. For the third quarter, we reported an adjusted net loss of $0.52 per share and an adjusted EBITDA of $144.4 million. Our discussion of third quarter results excludes the net effect of special items, including $14.6 million in incremental OpEx related to the Martinez refinery event, a $250 million gain on insurance recovery, a $94 million gain on the sale of terminal assets, an $8.5 million loss relating to PBF's 50% share of SBR's LCM inventory adjustment for the quarter and approximately $8 million of charges associated with the RBI initiative. The $250 million gain on insurance recoveries related to the Martinez fire is a result of the second unallocated payment agreed to at the end of the third quarter, of which the majority has already been received in Q4. Going forward, we will continue to work with our insurance providers for potential additional interim payment. However, the timing and amount of any agreed-upon future payment will be dependent on the amount of incurred covered expenditures plus calculated business interruption losses. Our Q3 P&L reflects incremental OpEx at Martinez of $14.6 million that we are reflecting as a special item because it relates to construction of temporary equipment to restart undamaged units and other fire-related non-capital expenses. While we anticipate recovering a portion of this amount through insurance, the specific amount will be determined as we progress further into the claims process. Generally speaking, any insurance proceeds we received in future periods will be reflected as a gain on insurance recoveries on our income statement and reported as a special item. Shifting back to our normal quarterly results discussion. Also included in our results is a $19.7 million loss related to PBF's equity investment in St. Bernard renewables. SBR produced an average of 15,400 barrels per day of renewable diesel in the third quarter. SBR's production was somewhat below guidance, driven by broader market conditions in the renewable fuel space. Throughout the year we've seen impacts from tariffs cascade through the market and the policy landscape continue to shift, adding uncertainty and volatility to the business. PBF cash flow from operations for the quarter was approximately $25 million, which includes a working capital draw of approximately $74 million, primarily related to the timing of cash interest payments, movements in inventory and falling commodity prices. Also included in our cash flow for the quarter are the previously announced tax refunds of $75 million, including interest, and a $175 million received through the sale of Knoxville and Philadelphia terminal assets, excluding commission and closing costs. Cash invested in consolidated CapEx for the third quarter was approximately $132 million, which includes refining, corporate, and logistics. This amount excludes third quarter capital expenses of approximately $128 million related to the Martinez incident. Year-to-date rebuild capital expenses through the end of the third quarter are approximately $260 million. Additionally, our Board of Directors approved a regular quarterly dividend of $0.275 per share. We ended the quarter with $482 million in cash and approximately $1.9 billion of net debt. Maintaining our firm financial footing and a resilient balance sheet remain priorities. At quarter end, our net debt to cap was 32% and our current liquidity is approximately $2.1 billion based on current commodity prices, cash and borrowing capacity under our ABL. If you take into consideration the second installment of our insurance proceeds already received in Q4, our liquidity and net debt position has improved compared to the prior quarter. As we look ahead, we expect to use periods of strength to focus on deleveraging and preserving the balance sheet. Operator, we've completed our opening remarks, and we'd be pleased to take any questions.

Operator, Operator

Your first question comes from Manav Gupta from UBS.

Manav Gupta, Analyst

I would like to first welcome Joe to his new role and wish him the best of luck. Matt, maybe you or someone else can address this. You mentioned some positive comments regarding the Martinez restart, which is drawing a lot of attention given the current capacity closures. While new pipelines may be constructed, that process could take 2 to 3 years. The key here is to get the refinery operational, so I am trying to gauge your confidence in achieving that. I understand there may be regulatory delays, but it seems the government is supportive of your efforts to get this facility running. Can you provide insight on where we stand in this process and your level of confidence in having this asset operational by the end of the year?

Matthew Lucey, CEO

Thanks, Manav. I don't anticipate any regulatory issues, to be clear. We have all our permits, and we've had a good working relationship with the state. As you said, I think they're very, very interested in getting the refinery back up and running. I have tremendous confidence in our team. They have done amazing work to get us to this point. It is a major lift. As Mike Bukowski can detail, any project that a refinery does usually has years of advanced work done. And when you have an unplanned incident like we had, it creates a much more difficult environment to execute because there is no preplanning. Our team has just distinguished themselves. Indeed, we have that requires us doing everything as safely and reliably as we can. If there's a moment in time when we need to take a breath or introduce a bit more time, there's always time for safety. But I have complete confidence in the team. We have all our permits in place. And so I think we just need to let it play out over the next couple of months.

Manav Gupta, Analyst

Perfect, sir. All the best with that. I want to revisit a comment you made earlier in the call regarding the widening of the dips toward the end of the quarter. I'm trying to understand the outlook for the heavy light differentials. It's clear that PBF is significantly influenced by this trend. If the dip continues to widen, it should lead to a substantial increase in your capture rates. Could you share what you're observing? Are there heavier discounted barrels starting to appear on the Gulf Coast or in other parts of your system, which wasn't the case two or three quarters ago? Please help us understand this better.

Matthew Lucey, CEO

Absolutely. I'm going to make a couple of comments and turn it over to Tom. Look, the market has been constrained if you go back starting over 4 years ago when barrels started getting pulled off the market. So when OPEC made its deliberate shift going back six months ago, there's simply a lag. And now obviously, they made their shift at a moment in time where you're going into peak runs and you're also going into crude burn in the Middle East. And so demand is sort of at its highest. In any scenario, there's going to be a lag. Considering the seasonal time that the tapering began, there was probably even more of a lag, one that was a bit frustrating to us. But indeed, we are now seeing crude loosen as a result of the OPEC moves. Tom?

Thomas D. O'Malley, Analyst

Thank you, Manav. To elaborate further, Matt did a great job summarizing the current peak run environment, crude burn, and OPEC's shift in policies, which has changed the market dynamics. This year, we've seen crude stocks increasing, particularly in non-OECD regions, while the Western or Atlantic Basin remains tight with low stocks. Currently, there is a significant amount of oil in transit. Shipping costs are high, and much of the oil at sea is affected by sanctions. Eventually, this oil needs to return onshore, which contributes to the current market conditions and the widening price differentials since it's more cost-effective to store oil in the U.S. than to ship it at elevated freight rates. Furthermore, we are observing an increase in barrels moving from the Atlantic Basin to the Pacific, particularly from Latin America, and we have started to purchase barrels that we haven’t acquired in several years. When discussing the market a year ago, we would have noted the taper and its impacts, along with Brazil's underperformance, while Guyana was just beginning to gain momentum. However, we have discovered significant oil reserves in those regions, positively influencing crude market dynamics, especially for coastal areas.

Operator, Operator

Your next question comes from Ryan Todd from Piper Sandler.

Ryan Todd, Analyst

This might be difficult to answer, but it could be positive news regarding the approval of another $250 million installment of the insurance proceeds. Can you provide insight on the timeline related to this, particularly about what it covers or what has been included in previous installments? Does it address costs and losses expected by year-end under the current plan or only up to the end of the third quarter? Additionally, how should we consider the likelihood of other significant installments in the future?

Matthew Lucey, CEO

Yes, I can address that to some extent, but I won’t get into detailed accounting. In the third quarter, we received a $250 million payment shortly after the quarter ended, so it’s not included in the results for that period. When you consider the third quarter and account for that $250 million received after September 30, we are slightly behind. Looking more broadly at the third quarter, we had an asset sale of $175 million. If you exclude that and then factor in the insurance payment that came in right after the quarter, while also considering that we were somewhat behind on some insurance collections during the quarter, I would say that our operations for Q3 appear to be cash flow positive to the tune of between $100 million and $200 million. Moving forward, I can only say we have a strong relationship with the insurance markets and underwriters. This may not be the case for other companies in different sectors or incidents. However, we've maintained a long-standing relationship with our insurance underwriters. Our team and I have been actively engaging with the insurance markets in London and hosted the U.S. underwriters here in New Jersey. We truly value that relationship. While there are some payments that are delayed, they are very manageable.

Ryan Todd, Analyst

Congratulations on the progress that you've made up to this point. Can you provide a little more color on maybe how much you've been able to capture to date on your OpEx per barrel reduction targets or CapEx run rate targets? What are the big buckets left to achieve as you work towards 2026 kind of target completion on that plan?

Michael A. Bukowski, Head of Refining

So thanks for the question, Ryan. This is Mike. So as I said, we're on target for the $230 million. I think as of today, we're close to about $210 million of implemented savings on a run rate basis throughout the course of the year. That's cash. So that's not just all OpEx. And so roughly think about that, as I said before, 70% on the OpEx, 30% CapEx. And so we look real good to finish up the year to hit our goal of $230 million. When we look across the system, remember, we just started this in two refineries back in January. And so there's kind of a time basis of this. But I think across the course of the year up to the third quarter, probably captured order of magnitude about $30 million to $40 million of OpEx and then another $10 million to $15 million of turnaround savings. One thing you may want to take a look at in our earnings release is the third quarter performance of the Delaware City refinery. You'll see that in an era where we had some headwinds on energy prices, utilization was about the same quarter-to-quarter, and we're showing a reduction in OpEx. So we're starting to see it get to the bottom line.

Ryan Todd, Analyst

Do you believe there is another phase to this process after the completion in 2026, considering that you are still early in this journey? Is there a potential for additional benefits coming up that might be apparent at this stage?

Michael A. Bukowski, Head of Refining

Yes, definitely. I tend not to think of this as legs or tranches. I tend to think of this as a continuous improvement journey that never really ends. But as I said in my prepared remarks, we added the other refineries in the third quarter to the program. And so initially, it was just Torrance in Delaware City, and then we're bringing on these other refineries. So a large impact in that $210 million has been through the central and just those two refineries. So additional savings will be coming online from the refineries that we added to the program. And then the way we're doing this, this is not just deferring expenses. This is finding waste, driving efficiency and eliminating costs. And so we will spend the time next year going through another what we call brainstorming or ideation process at all the facilities, one, to ensure we sustain what we have, but also to drive improvement going forward. So as I look towards the end of 2026, I see that run rate savings going up to over $350 million.

Operator, Operator

Your next question comes from Doug Leggate from Wolfe Research.

Douglas George Blyth Leggate, Analyst

I wonder, Matt, if I could address the lower turnaround expenses. As part of your efficiency drive, do we consider higher utilization as the new normal for PBF going forward? It seems that the entire industry has managed to increase its utilization, which would reset our view of mid-cycle free cash flow. We're curious if this also applies to your situation.

Michael A. Bukowski, Head of Refining

Our turnaround program is structured in several ways. In the past, we've been dissatisfied with our cost and schedule performance. We also see an opportunity to optimize our intervals, which we believe will lead to longer intervals. This change will allow for more runtime. We are collaborating with a third-party benchmarking firm to establish our turnaround budgets and schedules moving forward, which is how we plan to achieve savings. Consequently, we expect to have somewhat shorter turnaround durations and more effective processes, ultimately resulting in higher utilization when the units are operational.

Matthew Lucey, CEO

In regards to utilization broadly, I sort of think of it maybe in a simplified manner. I think you have a confluence of a number of events. One is if you have a winterless winter or if you have a stormless summer, it certainly makes the operating environment easier to operate if you don't have disruptions. And then we've seen that over the last number of seasons where there's been minimal impact, whether it's from storms or from harsh winters. And then you have, obviously, some creep, whether it's capacity creep, debottlenecking, some increases in throughput. And so numerators may be a bit dated. And then you have this pursuit of operational excellence where everyone is trying to become more efficient and become the best operators they can. And in so doing, you're able to increase your reliability and increase your throughput. We are on that journey, and we expect it to pay dividends for sure.

Douglas George Blyth Leggate, Analyst

It seems to be applying. I observed that Phillips and Valero have effectively replaced Lyondell Houston with better utilization. I'm grateful for the input. My follow-up question is for Joe. Joe, I don't know if this is something you can address. If we try to simplify all the moving parts related to costs, such as the money being spent on repairs and the insurance proceeds coming in, you took out a short-term loan to navigate through this. If we normalize the balance sheet, where do you think your net debt would end up, excluding contributions from future quarters? When you normalize for the money out and the money in, what would your net debt be if this event hadn't occurred?

Joseph Marino, CFO

That's an interesting question. Obviously, there will be a lot of different factors playing into the market and how our results would be if the event didn't happen. And part of the issuing of that additional notes earlier this year was in advance of the potential market that we were looking at, at that point. So some of that was outside of purely just Martinez related. So I think hard to specifically answer that question to down to a fine detail, but it would be less than it is today, but probably more than, from a net debt standpoint, than entering the year.

Douglas George Blyth Leggate, Analyst

I know it's a tough one to answer. Just to clarify what I'm asking. I'm not looking for the lost opportunity cost. I'm looking at for the extraordinary costs and the extraordinary cash inflows from insurance, if those were all taken out, is that a net debt lower number? Or can you put a magnitude on that or no? We're just trying to figure out how much did we deduct in our DCF with pure net debt on a normalized basis.

Joseph Marino, CFO

Yes. I'd say again, it's hard to put a fine point on that. Obviously, the cost, as we've said before, of actual repair costs are going to be substantially covered by our insurance. So that really won't have a meaningful impact on our overall net debt whether you look at it on a pro forma or go-forward basis. There's impact to the business and our net debt profile from the downtime for sure. And we think a good deal of that will be offset by BI insurance when everything is all said and done. But we don't have an exact impact of what that would look like at this point.

Operator, Operator

The next question comes from Neil Mehta from Goldman Sachs.

Neil Mehta, Analyst

There's been a lot of talk about moving product into the West Coast as some of your competitors retire capacity with three independent projects talked about either to the Southwest or even into California. Just your perspective on whether that can alleviate some of the pressure on PADD 5? And how do you think about timing and potential impacts of that?

Matthew Lucey, CEO

Yes, thanks, Neil. It's good to hear from you. Regarding the announced projects, I won't speculate on which, if any, will be completed. In the base case, we expect to face significant costs and timelines. As an observer and participant in the market, I suspect the base case may be overly optimistic regarding both time and expense; I tend to believe it will take longer as nothing is straightforward. Consequently, it will cost us money. Regardless of the duration, there will be considerable tariffs on any new pipelines constructed. We maintain that our in-state manufacturing facilities will be the lowest-cost producers. The state will require imports, whether from water or pipe, which will be pricier. Given the rebalancing in California refining, we're positioned very well in terms of both product and crude. With one refinery recently shut down and another scheduled to go offline, there's reduced demand for local crudes. Therefore, our position in California is particularly strong and promising moving forward, irrespective of when and how new pipelines are brought online, as there will be demand for products in a market that is short.

Operator, Operator

All right. Good color. And then early thoughts on 2026 CapEx, recognizing we're going to get a little bit more color in Q4, and you guys have done a good job keeping a lid on spend this year. But how do you think about some of the moving pieces as you move into '26? And is there a soft number that we should be thinking about penciling and recognizing we're going to get a harder number on the Q4 call?

Matthew Lucey, CEO

Yes. I would keep to our schedule on that. We do have a heavy turnaround season next year, but we'll get into that in normal course, Neil.

Operator, Operator

The next question comes from Phillip Jungwirth from BMO.

Phillip Jungwirth, Analyst

I was hoping you could just talk to what you're seeing this month in the SoCal market, just given the moving pieces with Phillips L.A. closing down two weeks ago. Are you seeing any benefit here? And obviously, we had the unplanned downtime, which really helped get along with other product prices.

Michael A. Bukowski, Head of Refining

It's difficult to assess the impact of Phillips at this moment due to significant tensions caused by numerous unplanned outages happening right now. As you mentioned, the market is quite dynamic, with pressures affecting gasoline, jet fuels, and distillates. Therefore, it's challenging to evaluate how these tensions influence the overall markets with just the downtime at Phillips. Additionally, there are many planned and unplanned events occurring on the West Coast that contribute to this tension, resulting in what we refer to as an all-bid market.

Matthew Lucey, CEO

Yes. In regards to just pulling yourself out of like the prompt screen, it is hugely impactful. There's going to be 100,000 barrels a day less of gasoline produced in the L.A. region. That now has to be imported from outside the state. And obviously, a significant amount of California crudes are no longer going to be procured by that refinery. And those crudes only home is with California refineries. So it will play out. The refinery is literally shut, I think, 2 weeks ago, and there's been lots of sort of activity in the marketplace, not related to the shutdown. So hard to unpack exactly. But over time, I think our position in California will prove out to be pretty compelling.

Phillip Jungwirth, Analyst

With California now at least trying to stem the decline of local crude production, issuing permits, how optimistic are you that this could be a benefit to PBF and in-state refiners or at least no longer a headwind with declining production?

Matthew Lucey, CEO

Yes. My old joke is, as a refining business, we're all big boys and we generally don't ask for help. You simply ask to stop bashing us in the head with a shovel. Systematically shutting in crude production was a significant headwind. I think with all that's going on in California, there's a recognition that that wasn't the single greatest policy to have in place and fixes have been put in place. So I think it's a removal of a headwind. It will allow certainly the valley in California to stem declines. And so my other thing as you find yourself in a hole, the first thing you do is stop digging. So hopefully, we can have declines arrested. Whether the valley grows, I can't comment on. But simply, it is a very, very positive step to get that legislation through. We work very, very closely with all the parties in Sacramento. It is hugely beneficial to have it in place because the alternative was very poor. And so our team has worked unbelievably and has worked in concert with a number of constituents in Sacramento, whether it's the CEC, the governor's office, with legislators. I think everyone appreciates the importance of supplying reliable, deliverable, affordable energy to the people of California, and they desperately need gasoline and diesel and jet fuel at affordable prices.

Operator, Operator

The next question comes from Matthew Blair from TPH.

Matthew Blair, Analyst

Could you talk about your outlook for refining capture in the fourth quarter? It seems like it could take a big step up. I think you already mentioned that crude diffs are trending a little bit wider, but it seems like other factors might be moving in your favor, less maintenance, less turnaround expense, better market structure, better jet versus diesel spreads, lower RINs. I mean, pretty much everything across the board seems to be moving in your favor. I think you're in the mid-30% range on capture in Q3. Do you think something north of 40% is realistic for the fourth quarter?

Matthew Lucey, CEO

We agree with your points about adding staff. Looking ahead is very constructive. Crude differentials are the biggest factor, and I believe they are set to improve throughout the quarter. RIN prices have been stable, but they will eventually need to rise, which will also affect import costs. The current marketplace is quite interesting, as European gasoline is priced higher than in the U.S., both now and in the future. This situation creates a constructive environment where European prices may need to decrease, which we don't anticipate happening soon, or North American Atlantic Basin PADD 1 prices will need to rise to draw in imports. We share your views on the improved marketplace.

Matthew Blair, Analyst

Sounds good. And then earlier, you mentioned some of the challenges in the renewable diesel space. One of your competitors just threw in the towel on RD. Do you have any thoughts to shutting down your RD plant? Or what's the thinking there?

Matthew Lucey, CEO

Our perspective is that the market has been challenging. However, we consider our asset to be among the top tier. There are numerous factors to consider regarding renewable diesel, especially with the recent administration shift, which has changed the program's focus from low carbon intensity incentives for reducing low-carbon fuels to an emphasis on boosting soybean production and usage. This alteration is significant and may create difficulties for several assets. Additionally, new regulations impose penalties on imported feeds, and imported renewable diesel is not eligible for the producer's tax credit, leading to a complex situation. Most indications suggest that this will likely result in higher Renewable Identification Number (RIN) prices. Furthermore, higher RIN prices are necessary not just to incentivize the manufacturing of renewable diesel but also because supply is declining while the Renewable Volume Obligation (RVO) remains steady. Therefore, I see a risk of increasing RIN prices. Hopefully, the administration recognizes this as they are currently inviting feedback on reallocation and related matters. It has certainly been a tough market, but our location and the capabilities of our plant differentiate us from many other players in the field.

Operator, Operator

Your final question comes from Connor Fitzpatrick from Bank of America.

Connor Fitzpatrick, Analyst

I apologize if some of this has been discussed before, but we're hearing that the vessels needed for installation at Martinez have a 60-day time frame for installation and construction. Have these arrived at the Martinez site yet? We believe they also require inspection and approval from Bay Area Air Quality Management, the EPA, and OSHA. Can federal approval be obtained during the government shutdown? You mentioned permitting earlier, but will there be any additional issues related to the shutdown and oversight? More generally, could you outline the timeline for the remaining equipment to be received, authorities needed for construction, and the effects of the shutdown on that timeline along with when all the equipment will be operational?

Matthew Lucey, CEO

All right. Look, I'm aware, maybe there was some fake news or stories. I would suggest everyone focus on what the company's official comments are. I'm not entirely sure where you're getting some of your information. But as I said, we have all of our permits to construct. We have a very good relationship with not only the state but with the county in regarding to get us to the finish line. And we have our plan, again, to commence restart in December, which takes into consideration everything that is required. We're certainly not going to get into explicit details despite you being in-house as a PBF person, you're not a PBF employee. We're not going to get into explicit details on exactly what equipment is being restarted when. But we have a very thoughtful and deliberate plan to restart the equipment, and we'll have all the approvals necessary to do that.

Connor Fitzpatrick, Analyst

That's very clear. I guess I should correct and say that I'm from Bank of America. I think there was a mix up, if you couldn't tell. I don't know. That's the only question I had.

Matthew Lucey, CEO

I appreciate the question and hope there won't be any confusion about it. As Mike mentioned, we will always prioritize safety, and we have a solid plan to get the plant operational again. I believe that wraps up our questions. Thank you all for your time and attention. I look forward to positive developments in the markets ahead. Thank you.

Operator, Operator

This concludes today's conference. You may now disconnect your lines at this time. Thank you for your participation.