Renewable Diesel and Biodiesel

Renewable Diesel Takes Smaller Cut Jim Lane “EPA continues to assert authority under the general waiver provision to reduce biofuel volumes based on available infrastructure,” says BIO. “This is a point that will have to be litigated. It goes against Congressional intent.” In Washington, the EPA released its proposed standards for 2014, 2015, and 2016 and volumes for renewable fuels. The volumes, as widely expected, include substantial reductions from the statutory standards in the original 2007 Energy Independence & Security Act. The EPA also released a 2017 proposed standard for biomass-based diesel. Yet, while attracting significant...

This entry continues a series on companies I sold as part of a portfolio cleanup prompted by the mess on Wall Street.  In the first entry I described what I plan to do with the cash, followed by the reasons why I sold Carmanah Technologies and Pacific Ethanol.  UQM Technologies was one I didn't sell.   I have not  mentioned Dynamotive Energy Systems (DYMTF) before.  I have mixed feelings about the company.  They use fast pyrolysis to make cellulosic biofuels, which I believe will prove to be one of the more economic pathways to cellulosic biofuels.  However, I believe that...

Jim Lane Though building capacity globally, Solazyme’s operations in Brazil are getting traction fast – and raised $235M last week. How much oil could be produced in Brazil via sugar-munching microalgae? Today, the Digest looks at Solazyme’s (SZYM) progress and the bigger picture. In California, two monster announcements came out of Solazyme headquarters last week. One related to project finance and one related to raising cash. In midweek, Solazyme Bunge (BG) Renewable Oils received approval for project financing in the form of a $120M (R$245.6M) loan from the Brazilian Development Bank (BNDES). ...

by Debra Fiakas CFA Biodiesel and biochemical producer FutureFuel Corporation (FF:  NYSE) will report fourth quarter 2015 financial results after the market close today.  No conference call will be held due to low attendance on recent calls.  The single published estimate for FutureFuel is for $0.28 in earnings per share on $122.5 million in total sales.  Despite an increase in this estimate in the last week, the number still represents a significant decrease in earnings compared to the prior-year period.  The Company has missed the consensus estimate in both of the last two quarters and we do not...

For a number of years, this (now old and outdated, but) very useful chart has been in circulation in energy circles, mapping the supply of energy to the world by looking not at prices, but at production costs. For one thing, it goes a long way to explaining why the price of oil can tumble so quickly when there is a fall off in demand, and explains why OPEC is troubled by unconventional oil in a way it is not so bothered by other energy sources such as renewable fuels. Renewables not only have been traditionally at the...

by Debra Fiakas CFA Last week the management of  Darling Ingredients (DAR:  NYSE) staged a webinar on its opportunities in biofuels.  Darling produces biodiesel in Kentucky and Canada and is in a renewable diesel joint venture with Valero Energy (VLO:  NYSE) in Louisiana.  As a recycler of wastes and excess from the food production processes, the production of energy with organic feedstock is a logical extension of Darling’s collection and aggregation infrastructure. The event did not do much for Darling’s share price, but the presentation triggered a few questions about RINs  -  shorthand for...

Jim Lane Dyadic International, Inc. is a global biotechnology company that uses its patented and proprietary technologies to conduct research, development and commercial activities for the discovery, development, manufacture and sale of products and solutions for the bioenergy, industrial enzyme and biopharmaceutical industries. Address: 140 Intracoastal Pointe Drive Suite 404 Jupiter, Florida 33477 Year founded: 1979 Stock Ticker: Pink Sheets: DYAI Type of Technology(ies) Patented and proprietary C1 platform technology based on a unique fungal microorganism which is programmable and scalable in producing enzymes and proteins in large quantities ...

Jim Lane A Biofuels and Biobased investment primer: An 18-combination, 8-character system for classifying bio investments Here’s our investment primer on how to size up the risks and the rewards and tune them to meet your goals. And, a system for organizing opportunities. So, you’re thinking about investing in bio? Here’s the good news – you’re not alone. Here’s the bad news – you’re not alone. There are retail, private equity, hedge fund, sovereign wealth, strategic, grower, VC and institutional investors snooping around too, and making active investments. For one thing, carbon’s making a comeback as the...

Jim Lane West Coast renewable fuel retailer says the launch of 100% drop-in renewable diesel has spiked sales on a per-outlet basis 5X jump in renewable content, and 3X jump in gallons sold. In California, Propel Fuels is reporting a 15X jump in per-outlet sales of renewable fuel for diesel engines, based on a 3X increase in gallons sold of its new Diesel HPR fuel and 5X increase in renewable content for Diesel HPR (100% renewable content, vs the 20 percent renewable content in B20 biodiesel, which Propel formerly sold). With the news, Propel is expanding...

In August, I argued that Biodiesel stocks could be in trouble from more efficient ways to turn the oils and fats they use as feedstock into fuel, and concluded the article by saying that the likely winners are suppliers of oils and fats, not the processors.  James Kingsdale, of Energy Investment Strategies has been thinking along the same lines.  Last week he wrote an excellent overview of the major biofuels industries, including some stock picks.   One of those stock picks was the diamond in the rough I wish I had known about when I wrote Biodiesel's Nightmare: Renewable Diesel...

by Debra Fiakas CFA Earlier this month biodiesel producer Renewable Energy Group, Inc. (REGI:  Nasdaq) reported a tidy profit of $22.3 million on record $1.0 billion in total sales.  Reported net income was $43.5 million, including accounting treatments for corporate recapitalization undertaken in the year.  Results from 2012 were noteworthy on a couple of counts.  It was the first time in the company’s ten-year history (including years of operation among predecessor firms) that sales exceeded $1.0 billion.  REGI produced 188 million gallons of biodiesel from a variety of feedstock, including non-edible corn oil, used...

Green Star Products Inc (GSPI) announced that they have developed and successfully commercially tested their advanced biodiesel reactor. GSPI reactors require an amazing two minutes to complete the biodiesel conversion reaction versus over one hour for the rest of the industry. This means that GSPI's processing rate through the reactor is at least 30 times faster than the rest of the biodiesel industry.

by Debra Fiakas CFA Insider buying is not one of my regular screening criteria in selecting long plays in the small cap sector.  However, to learn a chief executive officer has taken out his/her check book to buy shares in their company is influential.  In November 2016, the CEO of biofuel producer Renewable Energy Group (REGI:  Nasdaq) reported an increase in his stake in the company in recent months. With REGI shares just above the prices paid by the CEO just three months ago, it is timely to look more closely from the outside. In...