Marathon’s Dilemma in Investing in the Future of Clean Fuels

In 2025, Marathon Petroleum was weighing how to enter the low-carbon fuels market. Strategic planning manager Jessica Miller had to recommend whether to retrofit an existing refinery to produce renewable diesel from waste feedstocks or build a new greenfield facility that makes synthetic e-fuels from green hydrogen and captured carbon dioxide. Each option comes with its own investment, capacity, conversion losses, processing costs, government incentives, and uncertain prices and demand.

Students frame the decision, build a decision tree with two alternatives and three levels each of selling price and market demand, and use Excel to calculate the net present value of every branch over a 20-year horizon and the expected monetary value of each alternative. They then use Goal Seek to find how far the e-fuel price growth rate and the Department of Energy operating-cost credit could fall before the recommendation changes.

The case also asks students to weigh qualitative factors, including the trade-offs between retrofitting and building new, feedstock and infrastructure needs, and where to locate a new e-fuel plant. It fits operations management and business decision-making courses and can serve as a final project in a graduate course. The package includes the case, the data file, and a data description sheet, plus teaching notes with answers to all six assignment questions and a complete Excel solution.