Irving, Texas-based fuel ingredients developer, and producer Darling Ingredients reported a 32mn gal renewable diesel production by its joint venture Diamond Green Diesel during the first quarter of 2017, up 12pc (3.5mn gal) from the previous year.
Despite the increased production totals, Darling’s earnings (EBITDA) fell by 48% ($4.6mn gal) YoY.
The company completed its facility maintenance turnaround in approximately 18 days during the quarter, while the expansion towards an annual production capacity of 275mn gallon remains on pace to be completed during the second quarter of 2018.
When discussing the California market share, the company was less aggressive than previous quarter’s plans for increasing the share of its California business.
John Bullock, Darling chief strategy officer, claimed that over 50pc of Darling contracts are now delivered to the LCFS market, making up the majority of the company’s product sales. Since the beginning of the year, the firm has begun delivering physical cargos via pipeline, of which the profits Darling shares with partners involved in the process.
Thus, the full benefits of the LCFS market are not expected to achieve maximized effects until the 2018 market, when current pipeline contracts end.
In addition, the company believes a potentially retroactively added tax credit incentive will help its facility regain revenue.
“The market has been trained to believe that that tax credit will be in place because every single time we’ve gotten into these years, Congress has put the tax credit retroactively,” Bullock said.
Regarding the Argentine and Indonesian anti-dumping case, Bullock said: “It’s really not what we want”. Bullock estimated an additional $0.75-1/gal costs if someone wished to bring fuels from these to two regions to the United States.