Arkansas biodiesel and chemicals producer FutureFuel is set to resume biodiesel production later this year, the company announced this week.
FutureFuel intends to restart biodiesel production at its 4,000 b/d Batesville, Arkansas, plant, sometime in the fourth quarter, with the company citing improved regulatory clarity and better margins since it idled in June.
Several US biodiesel plants have either idled or scaled back production this year due to uncertainty over the 45Z clean fuel production credit and high feedstock costs, but falling soybean oil prices and further credit clarity are driving optimism, FutureFuel said.
A record US soybean crop paired with a sharp decline in the crop's export demand have weighed on soybean oil feedstock prices. Front month CBOT soybean oil futures have fallen by nearly 7¢/lb, or 12pc, since reaching a summer peak of 57.54¢/lb in late July.
FutureFuel's restart later this year also coincides with next year's change to the 45Z credit, which will remove the carbon reduction penalty from indirect land-use change for crop-based feedstocks, resulting in a greater credit to soybean-based biodiesel beginning next year. The fuel next year will be eligible for around 64¢/USG, compared with 32¢/USG in 2025, according to Argus estimates.
Overall US biodiesel production from January to August averaged just 72,000 b/d, down by 32pc from a year earlier, according to Environmental Protection Agency data.
