2024-18105. Foreign-Trade Zone 3; Application for Production Authority; Phillips 66 Company; (Renewable Fuels and By-Products); Rodeo, California

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Department of Commerce

Foreign-Trade Zones Board

1. [B-43-2024]

An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the San Francisco Port Commission, grantee of FTZ 3, requesting production authority on behalf of Phillips 66 Company (Phillips), located in Rodeo, California. The application conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.23) was docketed on August 8, 2024.

The Phillips facility (650 employees) is located within Subzone 3E. The facility was used for petroleum refining and is in the process of being converted into a renewable fuels production facility. Production under FTZ procedures could exempt Phillips from customs duty payments on the foreign components used in export production. The company anticipates that between eight to 14 percent of the plant's products will be exported. On its domestic sales, Phillips would be able to choose the duty rates during customs entry procedures that apply to treated renewable feedstock, sulfur, renewable fuels (naphtha; diesel; jet), sustainable jet fuel, butane, and mixed gas streams (duty rate ranges from duty-free to 8.0%, and 10.5¢/bbl) for the foreign-status inputs noted below. Phillips would be able to avoid duty on foreign-status components which become scrap/waste. Customs duties also could possibly be deferred or reduced on foreign-status production equipment. The request indicates that the savings from FTZ procedures would help improve the plant's international competitiveness.

Components and materials sourced from abroad (representing 40 to 45% of the value of the finished product) include: animal fats; oils (soybean; canola; rapeseed; distiller's corn; used cooking); mixed fats, oils, and grease (also known as FOG); and, greases (trap; brown; yellow (a mix of animal fats that may include used cooking oil)) (duty rate ranges from 0.43¢/kg to 3¢/kg, 3.4% to 19.1%). The request indicates that certain materials/components are subject to duties under section 301 of the Trade Act of 1974 (section 301), depending on the country of origin. The applicable section 301 decisions require subject merchandise to be admitted to FTZs in privileged foreign status (19 CFR 146.41).

In accordance with the FTZ Board's regulations, Juanita Chen of the FTZ Staff is designated examiner to evaluate and analyze the facts and information presented in the application and case record and to report findings and recommendations to the FTZ Board.

Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary and sent to: [e-mail]. The closing period for their receipt is October 15, 2024. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to October 28, 2024.

A copy of the application will be available for public inspection in the “Online FTZ Information Section” section of the FTZ Board's website, which is accessible via www.trade.gov/​ftz.

For further information, contact Juanita Chen at [e-mail].

Dated: August 8, 2024.

Elizabeth Whiteman,

Executive Secretary.