US west coast biofuel and chemical producer Crimson Renewables will pause production next year at its California biodiesel plant until margins improve and the industry receives further regulatory clarity.
The company's 3,000 b/d Bakersfield, California, plant will operate through the end of this year and then stop biodiesel production through at least the first half of next year, Crimson chief executive Harry Simpson told Argus. The Bakersfield plant is the largest of California's three operating biodiesel plants. Crimson's affiliated Bakersfield petrochemicals terminal, Delta Trading, will continue operations.
The biodiesel plant is not closing permanently, Simpson said. Rather, it is temporarily stopping production "because of the continued poor margin environment," he said. Outstanding policy issues affecting margins include long-delayed federal biofuel blend mandates, exemptions for small refiners and future rules in California's influential low-carbon fuel standard.
In November, Crimson laid off some staff as part of the decision to pause biodiesel production, but the plant has maintained a "sizeable" team so that production can resume on short notice, Simpson said.
Several US biodiesel plants have either idled or fully closed over the past two years under a combination of less lucrative federal incentives and rising renewable diesel production, which competes for the same feedstocks as biodiesel but faces fewer blend limitations.
