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