The biodiesel business has been hurt by falling prices for government-controlled credits.
Chevron is closing factories in Iowa and Wisconsin that make truck fuel out of soybeans, corn and animal fats because government rules have made the business unprofitable, the company said this week.
The value of biodiesel RINs—the kind Chevron was earning at the factories it closed—has fallen to 48 cents a gallon from $1.61 a year ago, according to OPIS, the Oil Price Information Service. Important companies in the industry include Darling Ingredients and Finnish company Neste, as well as smaller clean-fuel producers like Opal Fuels, Gevo and Calumet Specialty Products. All of their stocks are down by double-digits over the past year.
The EPA announced a renewable volume obligation—the amount of clean fuel that refiners have to make or buy—for biomass-based diesel of 2.82 billion gallons in 2023 and 3.04 billion in 2024. But producers in the U.S. made more than four billion gallons in 2023, and foreign producers exported nearly one billion gallons to the U.S., Fernandes noted.
It also makes 90 million gallons of other clean fuels including renewable diesel, a faster-growing version of clean diesel that can be mixed directly into fuel tanks without having to be blended with fossil fuels. Chevron is expanding its renewable diesel plant in Louisiana so that it has capacity to produce 350 million gallons.
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