A poor market environment and lack of clarity regarding the Clean Fuel Production Credit (CFPC) may have had an impact on several biofuel producers, causing either a suspension of operations or an exit from the industry.

On May 9, US refiner Vertex Energy announced its decision to suspend renewable diesel production at its refinery in Mobile, Alabama. This echoes Chevron’s March 1 decision to suspend roughly 77 million gallons of capacity. Economic indications are expected to pressure additional plant closures in coming months.

According to investment bank UBS, almost all petroleum refiners are now invested in renewable diesel production, and these assets are under pressure from an earnings standpoint, due to overcapacity.

Many refiners have had a year of straight losses and will need to decide if they really want to remain in the business.

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