05.17.2024
Uncertainty with 45z tax credit may affect Q1 2025 biofuel contracts
The expiring BTC provides a one dollar per gallon blenders credit up front with an additional 30 to 40 cents of credit to producers on the backend. Crimson...
The first quarter of the new year usually sees cyclically lower production. This has been true for most years, but not 2023 due to strong margins and a lot of additional renewable diesel capacity that came online at the end of 2022.
Expectations for Q1 2024 have been mixed. Several producers were announcing slower production runs for the first quarter just a few weeks back. The most cited reasons included poor margins and a surplus of RIN production.
Speaking with several producers earlier today, the sentiment has shifted. Nearly all of the producers surveyed either said they were already sold out through Q1, or they had January sold with no current expectations to reduce production.
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