Chevron-REG closing Madison biodiesel plant

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.

By Payne Williams