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Chevron (NYSE:CVX) said Friday it will indefinitely idle two biodiesel production plants in Wisconsin and Iowa, amid weakening economics for renewable fuels.
Chevron (CVX) bought biodiesel maker Renewable Energy Group for $3.15B in 2022, acquiring 10 biodiesel plants and one renewable diesel facility, but prices have dropped in recent months as supplies have increased and the value of renewable credits recently fell to a three-year low.
The price of a blend of 20% biodiesel fell last month to $3.45/gal of gasoline equivalent, from a peak of $4.80/gal in October 2022, Reuters reports.
U.S. annualized renewable diesel capacity in 2023 totaled 3.4B gallons, which could jump to 4.9B gallons by 2025, according to Argus.
The Chevron (CVX) plants in Ralston, Iowa, and Madison, Wisconsin, could produce a combined 50M gal/year of biodiesel.