The company blamed poor market conditions related to the EPA's renewable fuel goals for closing plants in Ralston, Iowa, and DeForest, Wis.
March 4 article in Carroll (Iowa) Times Herald reported that Chevron Renewable Energy Group (REG) is indefinitely closing two Midwest biodiesel production facilities — one in Ralston, Iowa, and another in DeForest, Wis. In the story, Neville Fernandes, vice president of Chevron REG, blamed poor market conditions for the shutdown, which will affect a total of 50 workers.
Chart: KHL Staff. Data: US Energy Information Administration
On March 1st article in Des Moines Registration, Fernandes said both facilities had been out of service since December. Brian Coker, plant manager for the DeForest facility, said in a LinkedIn post that the last day for workers at the plant will be April 12. A Chevron REG spokesman said both plants “will be shut down safely and methodically in the coming weeks in accordance with federal, state and local regulations.”
The DeForest facility is the only biodiesel production facility in Wisconsin, according to the most recent data from the U.S. Energy Information Administration (EIA), which is dated August 7, 2023. With Ralston's closure, EIA data show Iowa it will still have 10 manufacturing facilities — the largest number in the US
In the Des Moines Registration history, Fernandes said that if the company's profit margins improve, there is a chance that the factories will reopen.
On June 21, 2023, the US Environmental Protection Agency (EPA) announced its final rule under the Renewable Fuel Standard (RFS) program setting biofuel volume requirements from 2023 to 2025. For 2024 and 2025, targets volumes for biomass-based diesel — which includes biodiesel and renewable diesel — were 3.04 and 3.35 billion gallons, respectively.
Some groups, such as the Diesel Technology Forum (DTF), expressed dismay at the volume requirements. Power Progress reported that DTF Executive Director Allen Schaeffer called the 2023 targets, which for biomass-based diesel were 2.82 billion gallons, “poorly aligned with current conditions.” It also quoted Kurt Kovarik, vice president of federal affairs for Clean Fuels Alliance America, as saying, “The EPA is undermining the certainty our industry hoped for from a three-year RFS rule.”
On June 22, 2023, story by Des Moines Registration said the EPA “considered production estimates. But the agency said actual output has consistently fallen short of capacity.
EIA biodiesel plant capacity data, which biodiesel producers are required to submit to the EIA, show a decrease from 102 units and 2.55 billion gallons/year on January 1, 2019 to 59 units and 2.09 billion gallons/year on January 1 2023 In February 2023, EPA also estimated that production capacity for renewable diesel, which unlike biodiesel is chemically equivalent to petroleum diesel, could reach 5.9 billion gallons/year by the end of 2025 .In addition, EPE announced in September 2023 that renewable diesel production capacity in the US surpassed biodiesel for the first time.
The EIA data showed that Chevron REG is one of 48 biodiesel producers in the United States. It is one of four with multiple locations. Excluding the Ralston and DeForest sites, Chevron REG has seven production sites in the US. The company has two locations in Germany. Based on Chevron data (the EIA data does not include the company's Geismar, La. plant), total capacity for the rest of the U.S. facilities is 370 million gallons/year, or about 18 percent of U.S. production capacity in 2023, as reported by EIA.
