The average price per gallon sold (excluding the allocation of the 2018 and 2019 BTC) for biomass-based diesel was $2.90, an increase of 2.8 percent. At Dec. 31, 2019, accounts receivable were $858.9 million, an increase of $777.9 million from Sept. 30, 2019. Third-party renewable diesel gallons are used principally for blending with biodiesel. The U.S. Department of Commerce filed an antidumping and countervailing duty petition with the International Trade Commission against Argentine and Indonesian biodiesel producers in March 2017. Adjusted EBITDA was $65 million, compared to $103.2 million in the year-earlier period. The impact of the duties on BBD imports was dramatic. The U.S. biodiesel industry continued to face strong headwinds in 2019 due to the demand destruction wreaked by small refinery exemptions (SREs). Of course, the profits would have been even higher without the demand destruction caused by SREs, assuming the import duties remained in place. Digest Data Dashboard: A 2020 Snapshot Guide to Bioeconomy Fuel, Carbon, Equity Prices, Demand, Margins. We utilize the EMTS data because, at least in theory, it should be a virtual census of domestic production and imports of BBD and the EMTS data allow imports of BBD from two different pathways to be fully accounted for in the estimates. Weekly Retail Gasoline and Diesel Prices (Dollars per Gallon, Including Taxes) ... (ULSD) price became fully represented by the Diesel Average All Types price. Filling the Gaps in the Renewable Fuels Standard with Biodiesel, http://www.nacsonline.com/YourBusiness/FuelsCenter/Operations/News/Pages/ND0825173.aspx#.WadR_9GQw2x. Department of Commerce Proposes Penalties on Biodiesel Imports from Argentina, Indonesia.” Released August 25, 2017. http://www.nacsonline.com/YourBusiness/FuelsCenter/Operations/News/Pages/ND0825173.aspx#.WadR_9GQw2x, A member of the Tokio Marine HCC group of companies. ProAg is an equal opportunity provider and employer. The increase in operating income was mainly driven by GAAP recognition of all of the 2018 and 2019 net BTC benefit of $499.4 million in the fourth quarter of 2019, offset by the 2017 net BTC benefit of $206.5 million recognized in the first quarter of 2018. We increased renewable diesel sales and production, while foregoing incremental biodiesel sales that did not meet our profitability hurdles. Gallons produced decreased due primarily to focus on producing profitable gallons, which among other things, resulted in the closure of the company’s facility in New Boston, Texas, in July. After allocation of the BTC benefits for the period in which the gallons were sold, revenue was essentially flat year over year. * Doing business as Pro Ag Insurance Services, Inc. in California. Advanced biodiesel production methods are still at an early stage of commercialisation. Since the appearance of COVID-19 in China in late 2019 and its rapid spread across the world, demand for Once the tax credit expires, the incentive to push up prices, profits, and production disappears and the biodiesel industry in the past returned to a norm of losses. Profits are presented in terms of both total pre-tax net returns and percent return to equity. One of the co-products of the transesterification process is glycerin which can have a high value if it is refined. The increase in operating income was mainly driven by GAAP recognition of all of the 2018 and 2019 net BTC benefit of $499.4 million in the fourth quarter of 2019. Irwin, S. “The Profitability of Biodiesel Production in 2016.” farmdoc daily (7):38, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 1, 2017. ProAg is an equal opportunity provider. As previously noted, due to an administrative change, income from California LCFS credits for 2019 included three quarters compared to 2018, which included four quarters. USDA is an equal opportunity provider, employer, and lender. Glycerin and methanol prices were obtained from OPIS. Third, domestic BBD production increased from 1.872 billion gallons in 2016 to 2.173 million gallons in 2019. By comparison, the average return for the stock market over this period, as measured by the S&P 500, was 10.4 percent and the associated standard deviation was 18.1 percent. Additional insight about biodiesel profits is provided in Figure 2. Under the program, REG may repurchase shares and convertible notes from time to time in open market transactions, privately negotiated transactions or by other means. Learn more about this ‘A++’ (Superior) Ranked Insurer. This negative impact was approximately $30 million, which is not reflective of company performance and is a one-time occurrence. After allocation of the BTC benefits for the period in which the gallons were sold, revenue was essentially flat year over year. After allocation of the BTC benefits for the period in which the gallons were sold, net income from continuing operations available to common stockholders was $147.8 million compared to $327 million. The company also announced that its board of directors approved a repurchase program of up to $100 million of the company’s shares of common stock and convertible notes. UCOME RED GHG >90% FOB ARA (EUR per ton) Jan Jan Jan Jan Jan 500 750 1000 1250 1500. decreased by $0.01/gallon, $0.07/diesel gallon equivalent (DGE), $0.08/gallon and $0.07/gallon, respectively, when compared to July 2019. The slope of that breakeven relationship is 7.55, corresponding to an assumed conversion rate of 7.55 pounds of soybean oil per gallon of biodiesel, and the intercept of 0.60 reflects a $0.60 per gallon return for all other cost categories, including fixed costs. The purpose of this article is to estimate biodiesel production profits for 2019 and examine the influence of these factors on profitability. For example, in a previous farmdoc daily article (March 14, 2019) it was estimated that SREs reduced biomass-based diesel (biodiesel and renewable diesel) demand by over 700 million gallons in 2017, … The table presents estimates of biomass-based diesel (BBD) supply on annual basis for 2011 through 2019 based on EPA/EMTS data. These clauses specify how the biodiesel tax credit will be shared between the biodiesel producer and blender if the tax credit is not in place at the time a transaction is made but retroactively reinstated at some later date. The year started off well, with net profits peaking in early March at $0.42 per gallon, which was near the top of the range of profits since 2014. The U.S. has plenty of biodiesel production capacity and there is no issue of a blend wall with biodiesel on a national level. While it is true that SREs have reduced biodiesel demand since 2017, the imposition of import duties has insulated domestic producers from the full impact of this negative factor and allowed them to capture a larger share of a declining total supply. E85 ethanol was $1.99/gallon while propane topped the charts at $2.74/gasoline gallon equivalent. The processing costs for palm oil would be ~$0.53 per gallon, and the processing costs for soybean oil would be $3.48 per gallon. Total fixed costs of 26 cents per gallon of biodiesel through 2017 and 20 cents per gallon thereafter. Across all types of production feedstock (e.g., soybean oil, canola oil, animal fats) over January 2017 through November 2019 the average conversion rate was 7.57, almost exactly the same as the 7.55 conversion factor assumed above for the representative Iowa biodiesel plant model. • Examples: • FAME biodiesel = 1.5 • NE RD = 1.7 • Butanol = 1.3 5. Additionally, impacts on operating income included a decrease in risk management of $45 million and a $15.9 million decrease in North America biodiesel margins driven mostly by lower spreads. The table shows several distinct trends. The spike in profitability during 2011, 2013, and 2016 can be directly traced to the race by diesel blenders to take advantage of the $1 per gallon blender tax credit that expired at the end of those calendar years. [HTTP_ACCEPT_LANGUAGE] => en-US,en;q=0.8 Send your completed complaint form or letter by mail to the U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410 or email at program.intake@usda.gov. It should now be clear that the tailwinds provided to U.S. biodiesel producers by import duties in 2019 continued to overpower the headwinds provided by SRE demand destruction. Irwin, S. “An Alternative View of Biodiesel Production Profits: The Role of Retroactively Reinstated Blender Tax Credits.” farmdoc daily (7):57, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 29, 2017.
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