How long are the SAF contracts with $1-$2 premiums in place for, and can similar or better terms be expected upon renewal?

Bruce Fleming explained that the term contracts are "evergreens" with varying notice periods, typically 2-3 years. Renewals have consistently been within the guidance range, and the company is bullish on continued growth and margins due to underlying fundamental support from renewable energy credits and scope credits. “So the term contracts are evergreens. The notice periods, we have a distribution of those at this point because we've been selling SAF for 3 years now. And as we step into these, we're going to kind of have different notice period dates. But what I can tell you is the ones that we roll have renewed within that guidance range.”

Any update on CapEx, build parameters, engineering for the second phase of SAF expansion, given the supportive demand?

Todd Borgmann stated the focus is currently on the MaxSAF 150 commissioning and ramp-up. An independent project team is evaluating a modular second phase, but it's too early for specific announcements. They are bullish on the opportunity and expect to share more details soon. “We hope to be able to talk more specifically to that soon. I think in the past, we've said let's get a chance to get up, get through this commissioning, ramp up here over the next couple of months, and we'll certainly be out and looking forward to doing so in the not-too-distant future to talk about what's next and how the follow-up steps can play.”

How far are biodiesel producers from ramping to full capacity, considering impediments like feed costs, pricing, and 45Z credits?

Bruce Fleming noted that the market environment should incentivize small biodiesel producers. He mentioned "ghost capacity" that can return faster than expected, with analysts calling for 90% utilization by year-end. “But a lot of the analysts are calling for getting back into the 90% utilization range of biodiesel capacity by towards the end of this year.”

CLMT

Calumet (CLMT) Q1 FY26 earnings call: the analyst Q&A

Earnings call· Mar 2026 (Q1 FY26)· Materials· May 8, 2026

Source: earnings call transcript

Executive summary

Calumet Q1 FY26 — Strong Market Tailwinds and MaxSAF 150 Expansion

Calumet navigated a strategically pivotal quarter marked by a favorable renewable fuels market outlook following the EPA's Set 2 RVO and strong commodity spreads. Despite operational challenges at Shreveport and planned expansion work at Montana Renewables, the company is well-positioned to capture tailwinds, accelerate deleveraging, and pursue long-term growth. The MaxSAF 150 expansion is now operational, and the Specialties business demonstrated resilience in a volatile cost environment.

Highlights

Renewable fuels market outlook reset by EPA Set 2 RVO, supporting strong stable margins.
MaxSAF 150 expansion commenced operations in early May, expected to deliver a 4-5x increase in SAF volumes.
Specialties business demonstrated $54/barrel margins despite rapid crude cost inflation, with over 20 price increases implemented.
TRUFUEL business posted record sales volume in Q1 FY26 and April, benefiting from strong customer demand.
Company entered crack spread hedges for 2026 and 2027 fuels production at attractive levels to accelerate deleveraging.

Concerns

Adjusted EBITDA with tax attributes slightly down to $50.1 million in Q1 FY26 from $55 million in Q1 2025.
Operational event at Shreveport due to organic chlorides caused a loss of ~750,000 barrels of production and over $30 million in lost opportunity.
Specialty margins were temporarily compressed due to extreme crude oil price spike, with Performance Brands experiencing a 60-90 day lag in price increases.
Realized hedge losses of approximately $6 million during the period from early 2026 crack spread hedges.

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Specialty Products & Solutions Underlying business remains strong. Integrated business allows production of fuel and taking advantage of high-margin fuel environment. Specialty margins were temporarily compressed due to extreme crude oil price spike, but commercial team implemented over 20 price increases. Expect to see future benefit in Q2. Adjusted EBITDA Q1 FY26: $44.3 millionAdjusted EBITDA Q1 2025: $56 millionSales volume: exceeding 20,000 barrels per day (6th consecutive quarter)Specialty margins: $54/barrel	—	—	—	$44.3 million Adjusted EBITDA
Performance Brands Continues to benefit from commercial excellence strategy and premium brand TRUFUEL. Results partially impacted by margin compression and normal price lag (60-90 days). Successfully offset lost EBITDA from Royal Purple Industrial divestiture through disciplined cost controls and brand growth. TRUFUEL posted record sales volume in Q1 and April. Adjusted EBITDA Q1 FY26: $12.6 millionTRUFUEL sales volume: record	—	—	—	$12.6 million Adjusted EBITDA
Montana Renewables MaxSAF 150 expansion delivered on time and on budget. Stepping into market with significant tailwinds from transformational product mix shift. Expects meaningful cash flow generation. Business is at a positive inflection point with new RVO and diversified customer portfolio. Adjusted EBITDA with tax attributes Q1 FY26: $10.2 millionAdjusted EBITDA with tax attributes Q1 2025: $3.3 millionCalumet-owned 87% basis Adjusted EBITDA with tax attributes: $8.8 millionSAF volumes increase: four to fivefold (annual run rate basis)SAF premium over renewable diesel: $1 to $2 per gallon (contractual)	—	—	—	$10.2 million Adjusted EBITDA with tax attributes
Montana Asphalt Results in line with prior year, reflecting typical seasonality and price lag impacts in wholesale asphalt business. Moving into seasonally stronger Q2 and extremely supportive crack environment for fuels. Annual EBITDA (normal environment): $30 million to $50 million	—	—	—	—

Deals & partnerships

null Sale of Royal Purple Industrial business.

The results of Royal Purple Industrial business are reflected in Q1 2025 financials but not in the current period following the divestiture in March.

Capital programs

MaxSAF 150 Expansion completed

Period spend: $15 million

Funding: cash within MRL on the balance sheet

Benefit:four to fivefold increase in SAF volumes on an annual run rate basis

Delivered on time and on budget. Focus now on producing increased SAF volumes and ramping production.

Risks & headwinds

Operational disruption and production loss due to organic chlorides in crude stream. Q1 FY26

loss of about 750,000 barrels of production, over $30 million of lost opportunity

Mitigation:Identified cause and acted swiftly to manage risk, placing directly impacted naphtha processing equipment out of service and examining entire facility. Plant is now running about 50,000 barrels per day. Installed redundancy in sampling and quality monitoring.

Extreme spike in crude oil prices leading to temporary margin compression. Q1 FY26

crude oil prices increased over 50% in the 2-week period

Mitigation:Commercial team rapidly executed over 20 price increases across product lines. Expect to see future benefit in Q2. Performance Brands has a 60-90 day lag for price increases.

Realized losses from crack spread hedges. Q1 FY26

$6 million

Mitigation:Hedges were put in place at attractive historical levels to derisk a portion of fuels production and accelerate deleveraging, while leaving plenty of room for upside on remaining production.

Potential for massive volatility due to ongoing global conflicts. near-term

very volatile out there, meaningful conflict going on

Mitigation:Confidence in commercial team to react accordingly, as demonstrated by rapid price increases.

What to watch in Q2 FY26

MaxSAF 150 production ramp-up and performance validation

next couple of months

Current commenced operations in early May, finishing the ramp-up, performance test design that's probably, maybe 4 weeks out

Target Consistent product quality, steady production ramp, successful performance test.

Why it matters

Verifies the successful execution of a major capital project and its ability to deliver the expected 4-5x increase in SAF volumes, crucial for MRL's earnings power.

Through the initial operating period, we'll continue to condition the catalyst, complete a performance validation and deliberately and steadily ramp production to ensure consistent product quality for our existing customers and for our new customers to integrate into their supply chains over the next few months.

Find out whether CLMT delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the primary risks (cost, new supply, unexpected surprises) given the solid demand and pricing?

Todd Borgmann stated that there are no singular risks keeping them up at night, and the market is in good shape. He acknowledged volatility due to ongoing conflict but expressed confidence in the commercial team's ability to react. Specialty price increases are in place, though Performance Brands might see some lag.

“I'd say if there's anything, it's just acknowledgment that it's very volatile out there. And there's still a meaningful conflict going on, and we could see pretty massive volatility. We've seen how quickly these markets can move.”

asked by Amit Dayal · answered by Louis Borgmann

2 min read 7 chapters

Detailed narrative

Strategic Positioning and Market Tailwinds

Calumet is strategically positioned to capitalize on strong market tailwinds in both traditional and renewable energy. The EPA's Set 2 RVO announcement has reset the outlook for renewable fuels, and the company is entering a robust margin environment. The successful commencement of operations for the MaxSAF 150 expansion in early May further enhances its ability to capture these opportunities, despite Q1 results being impacted by operational downtime.

Specialties Business Resilience

The Specialties business demonstrated robustness amid extreme volatility. Despite a 50% increase in crude oil prices in March, the commercial team rapidly executed over 20 price increases across product lines, achieving $54/barrel margins in Q1. The company's integrated model and domestic crude supply provide stability, allowing it to capture intermediate value and run at max volumes post successful turnarounds at Cotton Valley and Princeton.

Renewable Fuels Market Dynamics

The EPA's Set 2 RVO has re-established a stable dynamic for biofuels, incentivizing utilization growth. Historically, the industry has seen consistent $2/gallon index margins for biodiesel. The new RVO requires higher utilization levels, which the industry can meet through carryforward RINs, imports, and efficiency improvements, aligning with the administration's goals for domestic energy and agriculture.

MaxSAF 150 Expansion and SAF Growth

The MaxSAF 150 expansion has commenced operations, shifting focus to increased SAF volumes. The plant will steadily ramp production to ensure consistent product quality for existing and new customers. The company expects a 4-5x increase in SAF volumes on an annual run rate basis, leveraging a contractual SAF premium of $1-$2/gallon over renewable diesel and an industry-leading low-cost structure.

Shreveport Operational Event and Recovery

Q1 financial results were impacted by a previously disclosed operational event at Shreveport, where organic chlorides in the crude stream caused a loss of approximately 750,000 barrels of production and over $30 million in lost opportunity. The team swiftly managed the risk, made necessary repairs, and installed redundancy in quality monitoring.

The plant is now fully operational, running at about 50,000 barrels per day since April.

Hedging Strategy and Deleveraging

To fortify deleveraging targets, Calumet entered crack spread hedges for portions of 2026 and 2027 fuels production, covering approximately 10,000 barrels per day. These hedges were placed at attractive historical levels, derisking a portion of fuels production while leaving upside for the remainder. The company aims to use strong cash flows to accelerate its deleveraging plan.

Performance Brands Momentum

The Performance Brands segment, particularly TRUFUEL, continues to benefit from commercial excellence. Despite margin compression and price lag due to its retail-oriented customer base, TRUFUEL posted record sales volumes in Q1 and April. The segment successfully offset the lost EBITDA from the Royal Purple Industrial divestiture through cost controls and brand growth.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.