Chevron to buy REG, in joint venture with Bunge

US multinational energy corporation Chevron announced on 28 February that it would acquire biofuel producer Renewable Energy Group (REG) for US$3.15bn, citing REG’s expertise in feedstock sourcing and market access as factors to help boost its renewable fuels business.

The deal is expected to close in the second half of this year, subject to regulatory approval.

Chevron said the acquisition was expected to speed its progress towards expanding its renewable fuels capacity to 100,000 barrels/ day by 2030. Part of that growth would come from REG’s current expansion at its existing renewable diesel plant in Geismar, Louisiana, and Chevron’s project to convert its El Segundo refinery in California to renewable diesel production.

REG is headquartered in Ames, Iowa, and Chevron said Iowa was expected to become the epicentre for its renewable sourcing, with its new renewable fuel joint venture with Bunge North America, also to be managed out of Ames.

The signing of the joint venture deal was announced on 22 February, with Bunge agreeing to contribute its soyabean processing plants in Destrehan, Louisiana, and Cairo, Illinois, and double their combined capacity from 7,000 tonnes/ day by the end of 2024.

Bunge would operate the facilities while Chevron would have purchase rights for the oil for use as a renewable feedstock.

REG is a leading producer of biodiesel and renewable diesel in North America and operates nine bio-refineries in the USA and two in Europe.

BP and Nuseed in carinata agreement

Global seed company Nuseed and British multinational oil and gas company BP have agreed a 10-year offtake deal to promote the use of carinata oil as a biofuel feedstock.

As part of the deal, BP would purchase Nuseed’s carinata oil and process or sell it into growing markets to supply sustainable biofuels, Nuseed said on 1 February.

A subsidiary of Australian agricultural chemical firm Nufarm, Nuseed added carinata to its global portfolio in November 2019, following a successful pilot project in Argentina.

Nuseed was currently increasing commercial production in Argentina and planning expansion programmes in South America and the USA, the company said, with initial research and market development programmes also underway in Europe and Australia.

Photo: Adobe Stock

BP will buy or sell Nuseed’s carinata oil as a biofuel feedstock in a 10-year deal

IN BRIEF

UK: British multinational oil and gas company BP announced on 3 February that it had acquired a 30% stake in UK hydrotreated vegetable oil (HVO) producer Green Biofuels (GBF).

Founded in 2013, GBF’s products are made from feedstocks such as vegetable oils and animal fats.

It has delivered over 55M litres of HVO products to the UK market over the past two years, according to BP.

USA: US speciality refining company Vertex Energy has announced a five-year renewable diesel supply agreement with Idemitsu Apollo Renewable Corporation – a subsidiary of Japanese energy firm Idemitsu Kosan.

The agreement was conditional on Vertex closing its planned acquisition of the Royal Dutch Shell Mobile refinery in Alabama, and the subsequent conversion of its hydrocracking unit to produce renewable diesel fuel, Vertex said on 17 February. The project was due to become operational by the end of this year, on completion of the acquisition.

Under the Idemitsu deal, Vertex would supply 100% of the renewable diesel produced at the Mobile refinery to Idemitsu for five years, with Idemitsu paying an indexed, spot-market price for each gallon.

EC may tax crop-based biofuels and fossil fuels equally

The European Commission (EC) is considering taxing fossil fuels and crop-based biofuels in the same way, according to a 10 February report by EURACTIV.

The EU executive recently proposed the revision of the 2003 Energy Taxation Directive (ETD), which currently did not take into account the environmental performance of energy products, the report said.

“For example, there is no link in the ETD between the minimum tax rates of fuels and their energy content or environmental impact. The rules have also failed to keep pace with the development of new and alternative fuels,” an EU official told EURACTIV, adding that a complex patchwork of exemptions had proliferated across the bloc, leading to a “distortion across the single market”.

Current legislation has resulted in tax anomalies, particularly in the Visegrad region (Czech Republic, Hungary, Poland and Slovakia), where biodiesel and bioethanol are taxed higher than diesel and petrol, according to data from biofuels associations.

The EU official said the new system would ensure that the “most polluting fuels are taxed the highest”.

According to the new proposal, the lowest minimum rate of €0.15/GJ (US$0.17/ GJ) would apply to electricity, low-carbon fuels, renewable fuels of non-biological origin and advanced sustainable products (such as sustainable biofuels, bio-liquids and bio-gas).

The next lowest category would be that of sustainable, but not advanced products (such as biofuels, bio-liquids and bio-gas) with a tax rate of €5.38/GJ (US$6.01/GJ).

Conventional fossil fuels, such as gas oil and petrol, would have the highest minimum rate, the report said.