Producer
Chevron Renewable Energy Group (formerly REG)
Formerly Renewable Energy Group (REG), acquired by Chevron Corporation (NYSE: CVX) in June 2022 for $3.15B — making Chevron the largest U.S. biodiesel producer through one acquisition. REG was the largest independent U.S. biodiesel company with 11 production facilities and ~90 million gallon/year capacity when acquired. Now operates as Chevron Renewable Energy Group, the renewable fuels arm of one of the world's largest oil companies. Produces FAME biodiesel from soybean oil, canola, and used cooking oil (UCO). Geismar, Louisiana facility is one of North America's largest biodiesel plants. The same oil major that produces and refines petroleum also now makes the renewable biodiesel blended into that petroleum — vertically integrated from fossil to renewable.
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FAME Biodiesel Production (11 US Facilities)
60%Renewable Diesel (HVO/HBD)
25%Feedstock Sourcing & Trading
10%Chevron Integration
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Did you know2022
In June 2022, Chevron Corporation — one of the world's largest oil companies — acquired Renewable Energy Group (REG), the largest independent U.S. biodiesel producer, for $3.15 billion. REG had 11 production facilities and ~90 million gallons/year capacity. The acquisition made Chevron the largest U.S. producer of FAME biodiesel — the same fuel that's blended into petroleum-based heating oil to meet state renewable mandates. Chevron now simultaneously: (1) produces petroleum-based heating oil at its refineries; (2) produces the FAME biodiesel that's mandated to be blended into that heating oil; and (3) holds the resulting blend in its distribution terminals. An oil major buying the largest renewable fuel company to supply mandated blending credits to itself is the most vertically integrated response to renewable fuel mandates possible.
Chevron ↗Origin2023
Renewable Energy Group (REG) was founded in 2006 in Ames, Iowa -- at the beginning of the US biodiesel industry's commercialization phase, enabled by the Energy Policy Act of 2005 which created the Renewable Fuel Standard. REG grew aggressively through acquisition of biodiesel plants built by smaller operators who had entered the market on RFS incentives but lacked the working capital and feedstock procurement scale to survive commodity price volatility. By 2020, REG had become the largest US independent biodiesel company with 11 facilities across Iowa, Texas, Louisiana, and other states. Chevron Corporation acquired REG in June 2022 for $3.15B -- the largest acquisition in the US biodiesel industry's history. Chevron's rationale: mandated blending requirements (state heating oil biodiesel mandates in Northeast states) meant that every petroleum-based heating oil barrel Chevron distributed had to include biodiesel. Buying the largest domestic biodiesel supplier internalized the supply chain for mandated compliance -- and gave Chevron the renewable fuel credit (RIN) generation capability that created significant valuation in REG's business under the federal Renewable Fuel Standard.
Chevron Corporation ↗