US-based biorefinery owner and operator Renewable Energy Group (REG) announced last Thursday increased production, sales, and revenue figures during the first quarter of 2018, due predominantly to the recognition of the federal biodiesel blenders tax credit (BTC).
The Ames, Iowa-based biomass diesel producer reported 106mn gallons of fuel produced during the first quarter of 2018, a 10pc increase from the prior year. Total gallons sold during the three-month period registered 135mn gal, an over 10pc YoY increase. Revenues during this period were $689.3mn, a 65pc YoY increase.
The company primarily attributed the revenue increase to the reinstated BTC, while also attributing the YoY increase to gallons sold and average selling price, which rose nearly 10pc from the previous year to $3.18/gallon.
“We are very pleased with our first quarter results,” said REG President and CEO Randy Howard. “We generated $17.5mn of Adjusted EBITDA in the first quarter which traditionally is a period when we operate at closer to a break-even level without the BTC in effect. Energy prices ran up late in the quarter resulting in risk management losses that negatively impacted our Adjusted EBITDA for the first quarter. However, the higher energy prices should result in better margins on those gallons once delivered in the second quarter.”
The company head added that the current margin environment looks strong, as a result of higher energy prices and lower feedstock prices, leading to an expected “solid” second quarter based on current market conditions.
The nations largest producer of biodiesel followed up it’s Q1 2018 financial earnings report with the announcement of a new clean-burning diesel fuel. The product, REG Ultra Clean Diesel, has been approved by the California Air Resources Board (CARB) for year-round use throughout the Golden State under the Alternative Diesel Fuel regulation.
The fuel, which REG claims is among the lowest-emission diesel fuels on the market, will compete against Neste’s low-carbon fuel offering, Neste My Renewable Diesel, which is produced entirely from renewable raw materials and cuts greenhouse gas emissions by up to 80%.
Renewable Energy Group owns and operates 15 biorefineries globally, with a nameplate production capacity of 502mn gallons annually. The company is currently constructing four additional biorefineries across the US, with an estimated annual production capacity of 150mn gallons.