Chevron-REG closing Madison biodiesel plant

  • : Biofuels
  • 24/03/01

Chevron-REG's Madison biodiesel plant in DeForest, Wisconsin, is closing indefinitely "due to market conditions," according to a social media post from the plant's manager.

The closure of the 2,000 b/d plant comes amid deteriorating production economics for biodiesel, with a low Renewable Volume Obligation (RVO) for producers and extensive renewable diesel (RD) capacity coming online this year.

The Argus RVO has hovered at four year lows amid a tidal wave of D4 renewable information number (RIN) credit generation brought about by rising levels of RD production. In 2023, 7.96bn D4 RINs were generated — a 38pc increase compared with 2022 generation figures.

US annualized RD capacity in 2023 was 3.4bn USG and could grow to 4.9bn by 2025.

RD can be used as a drop-in fuel in place of petroleum diesel. Producers of RD receive more RIN credits than producers of biodiesel, leaving those plants less competitive, according to participants.

Chevron-REG has seven biodiesel plants in the midcontinent, totaling 21,000 b/d of output, including its DeForest plant, according to the Energy Information Administration (EIA).

Chevron-REG could not be immediately reached for comment.

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more