Biofuels

by Debra Fiakas, CFA Initially investors were worried about a few delayed orders as a consequence of the coronavirus outbreak in China.  The global supply chain, of which China is a critical link, would be temporarily interrupted by work stoppages in that country.  As the virus jumped to other countries it became clear that businesses all over the world could experience business interruption and that could mean significant earnings erosion.  Investor alarm spiked as denial and dysfunctional appeared to be the main themes in the U.S. policy response to the situation.  Panic ensued destroying billions in the U.S. capital base.  Bank of America estimates the...

by Jim Lane In another small but sharp blow to the Trump Administration’s strategy for American manufacturing revival, news arrives from Texas of a second smaller biodiesel shuttering owing to “ challenging business conditions and continued federal policy uncertainty,” as Renewable Energy Group (REGI) phrased it in announcing the closure of its15 million gallons per year New Boston, Texas biorefinery.  The company is currently working with plant employees on relocation opportunities within the production network. The tax credit issue The forces impacting the US biodiesel industry at present are complex, but REG in this case is pointing the blame at the biodiesel tax...

by Helena Tavares Kennedy The seasons are changing in many parts of the world right now, but what really is changing this autumn is how the world is looking at renewable diesel. Phillips 66 and REG’s announcement about a new renewable diesel plant on the U.S. West Coast planned for 2021 comes after a notable increase in refineries that are being converted and changed over to renewable diesel. Change is good, especially in this case. As Bob Dylan sang, “For the loser now, Will be later to win, For the times they are a-changin’.” And who knew he was singing about the RFS...

by Jim Lane “EPA Reneges on Trump’s Biofuels Deal”, said the Iowa Renewable Fuels Association in reacting to the US Environmental Protection Agency’s new plans for fulfilling federal renewable fuel requirements. EPA released a proposed supplemental rule for the Renewable Fuel Standard today, and the bioeconomy is up in arms, and the outrage is centered in farm country, once a Trump bastion of support. “IRFA members continue to stand by President Trump’s strong biofuels deal announced on Oct. 4, which was worked out with our elected champions and provided the necessary certainty that 15 billion gallons would mean 15 billion gallons, even after...

Yay or Nay for EPA? RFS Volumes out for 2020, Biodiesel for 2021 – What’s the reaction from industry? by Jim Lane What’s the reaction from industry? Coal for Christmas? Should Santa bring coal for EPA’s stocking this year? Do the biofuels and agriculture industries think the EPA just put coal in their stocking? Is it thumbs up or thumbs down from biofuel industry advocates on last week’s U.S. Environmental Protection Agency renewable fuel volumes? What about the exempted volumes? The Ruling – Rotten or Respectable? First, a bit on the EPA ruling that establishes the required renewable volumes under the Renewable Fuel Standard (RFS) program for...

by Jim Lane What in the world has gone right with Gevo? For years now, Gevo (Nasdaq:GEVO) has remained true to a vision of low-carbon, advanced renewable fuels, when so many others pivoted away to the world of ABF — Anything But Fuels. Some tried chemicals, cannabis, algae, natural gas, nutraceuticals, vegan foods — lately, protein has been all the rage. Gevo was one of the few true believers and paid the price of stock price punishment and near-extinction, for years. While they weathered a debilitating patent battle with DuPont, until it settled and DuPont imploded. And the collapse of oil prices...

The last post highlighted several companies in the alternative energy, conservation and environment technology fields that have delivered exceptional price performance over the last year.  Prospects for growth in sales or earnings appeared to be key drivers of the price movement.  It makes sense to seek indicators of growth as cues for those companies that may become tomorrow’s price movers. Crystal Equity Research’s novel alternative energy indices were a good place to go on a ‘quest for growth.’ Beach Boys Index  -  Biodiesel The two analysts who publish estimates for Renewable Energy Group (REGI:  Nasdaq)apparently expect a surge in growth in the current year followed by a leveling...

Prelude to a spin-off? by Jim Lane The Archer Daniels Midland Company (ADM) is breaking news of breaking off their ethanol unit…and a tumbling 40% decline in profit. In Chicago, Archer Daniels Midland Company reported their financial results for the quarter ended March 31, 2019, but most interesting to us, they are looking at separating their ethanol business with the option of spinning it off completely. They are also taking other actions to restructure and deal with challenges they say include weather issues and trade pressures. ADM announced a “series of measures to continue to underpin long-term-value creation” which included: “First, to meet growing customer...

Neste reaches 1B gallons renewable diesel sale, runs in fire trucks, ambulances and school vehicles In Texas, Neste U.S., Inc. (NEF.F, NESTE.HE, NTOIF, NTOIY) is celebrating its 1 billionth gallon of Neste MY Renewable Diesel sold in North America which has effectively helped reduce more than seven million metric tons of greenhouse gas emissions in the Earth’s atmosphere. This is the equivalent of removing 1.6 million passenger vehicles from the road for one year. “There’s never been a better time to take a closer look at the steps we’re taking to ensure we’re leaving our planet in a healthier state for future generations,”...

by Tom Konrad, Ph.D., CFA Earnings Season Continues Below are three more updates on second quarter earnings which I've been sharing with my Patreon supporters.  If you'd like to support my writing and see those thoughts in a more timely manner, consider becoming a patron. becoming a patron. For everyone else, I'm reprinting those thoughts below. Covanta Earnings (published August 2nd) Waste to energy company Covanta Holding Corp (CVA) saw most of its business recovering towards the end of the second quarter.  Management is reluctant to predict if the positive trend will continue into the third quarter and for the rest of the year, but...