Renewable Diesel Margins Swing to Profit
Fuel distributors and logistics operators should track feedstock supply and credit values as renewable diesel output recovers.
Updated on Nov. 4, 2026 in Oil and Gas
Marathon Petroleum reported sharply higher third-quarter results for its renewable diesel segment, with revenue and adjusted EBITDA both swinging well above year-earlier levels. The segment, which runs plants in Dickinson, North Dakota, and Martinez, California, is a key profit driver for U.S. refiners converting feedstocks into lower-carbon fuel.
Why it matters
Marathon attributed the turnaround to a stronger margin environment, improved regulatory credit values and higher throughput. For operators in fuels, logistics and feedstock supply, the results signal that renewable diesel economics have recovered from a difficult prior year.
Renewable diesel segment revenue reached $1.368 billion in the third quarter, compared with $716 million a year earlier. Adjusted EBITDA swung to $254 million from a $56 million loss, and the first nine months reached $550 million versus a $117 million loss.
The players
Marathon Petroleum
Marathon Petroleum is one of the largest independent petroleum refiners and marketers in the United States, operating refining, logistics and renewable fuels businesses.
Neste
Neste is a Finnish renewable fuels producer and a major global supplier of renewable diesel and sustainable aviation fuel.
Imperial Oil
Imperial Oil is a Canadian integrated oil company that operates the Strathcona refinery, which includes a renewable diesel facility.
The details
Renewable diesel is produced by processing plant and animal fats and other feedstocks into a fuel that can substitute for conventional diesel. Marathon's facilities ran at 89% capacity in the quarter, and the company said it is using feedstock and logistics flexibility to respond to shifting market conditions. The Martinez biorefinery is operated through a joint venture with Neste, which spreads operating exposure across two partners. Higher throughput combined with better regulatory credit values amplified the margin recovery.
Timeline
Q3 2025 served as the year-earlier comparison period for the segment's results.
Marathon reported its third-quarter renewable diesel results on November 3, 2026.
The Dickinson facility is scheduled for a planned turnaround in the fourth quarter of 2026.
Market Landscape
Marathon's renewable diesel recovery follows a loss-making 2025, when the segment's margins were squeezed by weaker fuel spreads. Imperial Oil's record canola throughput at its Strathcona facility, reported October 30, 2025, points to feedstock demand that is also rising across the sector.
Operators in fuel distribution and logistics should watch feedstock pricing and throughput at renewable diesel plants, since production shifts can affect supply availability. Businesses that rely on regulatory credit value should factor in how sensitive their margins are to credit price changes.
The takeaway
The segment's swing from loss to strong profit shows how heavily renewable diesel margins depend on regulatory credit values and throughput. Operators should track the fourth-quarter capacity utilization figure and the Dickinson turnaround timing as near-term indicators of supply conditions.
What happens next
Marathon's renewable diesel segment is expected to run at 85% capacity utilization in the fourth quarter, and a planned turnaround at the Dickinson facility is scheduled for that period.
Further reading
For broader context on refining and fuels markets, see the Oil and Gas section.
