Chevron Renewable Energy Group is “indefinitely idling” its biodiesel plants in Ralston and Madison, Wisconsin
How much of the REG business is impacted? # of employees?
8 replies (most recent on top)
Still winning
It was all about “the credits” anyway and they just weren’t enough.
Chevron purchased REG for the renewable diesel technology. The biodiesel side is the iPhone one while RD is the iPhone 5. With geismars expansion going online this year we will probably see more bio plants shut because of how much RD is on the market. The two plants are not the end as the others will follow probably before the end of the year. The people in these plant can already see the writing on the walls. I wouldn’t be surprised if they close more before June. This was all foreseeable and known to those who knew the market.
You will never hear of these plants again. They will be quietly written off as losses.
So CVX once again brings an overabundance or bureaucracy, process, slow decision making, micro management, and we see proof - once again - that when you bring entrepreneurial businesses that were successful outside into CVX that they suffocate and ki-l die.
This is the same as what happened to the natural gas market in the USA. Chevron timing was bad and they bet on upside growth and it did not happen. So I guess they will wait and see if the market conditions change and re-evaluate the investment and their plan can change. I suspect they will sell it at a loss same to AMBU and few other assets.
It is not subsidized - open market pricing. Just too much out there so prices crashed. Same will happen with oil as renewables take over.
It's well known that biodiesels are a money loser unless there's significant government subsidies.