Chevron shutting down biodiesel plants in Iowa, Wisconsin

March 6, 2024

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Chevron Renewable Energy Group is shuttering operations indefinitely at its biodiesel plants in Ralston, Iowa, and Madison, Wis.

In 2022, Chevron acquired Ames, Iowa-based Renewable Energy Group for a reported $3.15 billion with the goal of growing toward a production capacity of 100,000 barrels per day by 2030.

“Together we can grow more quickly and efficiently than either could on its own,” Chevron Chairman and CEO Mike Wirth said in February 2022.

The Iowa facility has been in operation since 2002 but has been idled since December, according to the Carroll Times Herald. The Madison plant began operations in 2007.

Between the two facilities, 50 million gallons of biodiesel were produced annually. However, the production of biodiesel is costlier than that of conventional diesel, and biodiesel has seen a steady decline in market value in recent months.

According to the Energy Information Administration, production capacity of renewable diesel in the U.S. reached 3 billion gallons per year in 2023, surpassing biodiesel production for the first time ever.

“Rising targets for state and federal renewable fuel programs and the renewal of biomass-based diesel tax credits are driving the growth in renewable diesel capacity,” the EIA said.

Overall biofuels production, including renewable diesel and biodiesel, saw an increase to 23 billion gallons last year. But biodiesel accounted for only 9% of that capacity.

On its website, Chevron Renewable Energy Group says it produced 480 million gallons of biodiesel and reduced its carbon output by 4.1 million metric tons in 2021.

Chevron idles two US Midwest biodiesel plants as profits slip https://t.co/1jDoxLiNek pic.twitter.com/1K5ab0i79d

— Reuters (@Reuters) March 2, 2024

Fuel market

A decrease in U.S. refinery utilization is putting upward pressure on fuel prices, according to EIA.

Since January, operable capacity of U.S. refineries is down 11% overall and has plummeted as much as 81% in February.

Retail averages for diesel are still below last year at this time, but due to a decrease in inventories, fuel prices increased from the previous month.

Fuel reports are updated daily on the Land Line diesel prices page. LL