Chevron Corporation reported fourth quarter financial results on January 31st. During the earnings call, company officials confirmed that the renewable diesel expansion project at the biorefinery in Geismar, Louisiana, is in the final stages of commissioning.

The Geismar expansion project has been moving forward for several years with plans to increase the plant’s renewable diesel capacity from 90 million gallons to 340 million gallons.

The plant was the first renewable diesel plant in the U.S. In 2008, Dynamic Fuels LLC, a joint venture between Tyson Foods and Syntroleum Corp. broke ground on the former 75 MMgy plant, and the biorefinery came on line in 2010. in mid-2014, the Renewable Energy Group (REG) purchased the plant and held a grand opening in November of that year. In 2020, REG announced plans for an expansion, which began construction the following year, and was still in progress when Chevron acquired REG in mid-2022.

Tidewater Renewables Ltd. announced Jan. 6 that it has filed a countervailing and anti-dumping duty complaint with the Canada Border Services Agency (CBSA) in late 2024 in response to renewable diesel imports from the United States. The company says these imports are causing serious harm to the renewable diesel industry in Canada and that legal action is needed to protect the level playing field.

Tidewater Renewables has retained outside trade law counsel to assess the market distortions caused by U.S. renewable diesel subsidy and dumping practices and to propose a legal solution. If the complaint is successful, the Company anticipates that a tariff of 50 to 80 cents per liter (approximately 35 cents to 56 cents per liter) could be imposed at the Canadian border on U.S. imports of renewable diesel fuel, which equates to $1.32 to $2.12 per gallon.

According to Tidewater Renewables’ estimates, U.S. renewable diesel imports receive an average of 40 to 60 percent of the subsidy and dumping benefits. We support healthy competition, but we can’t compete in a market that is heavily distorted by foreign subsidies and dumping practices,” said Jeremy Baines, CEO of Tidewater Renewables. The legal action was taken to restore fair competition, protect employee and shareholder interests, and ensure the long-term growth of Canada’s renewable diesel industry.”

Under the Special Import Measures Act, the CBSA may initiate an investigation in February 2025 and impose preliminary tariffs in May. Final tariffs could be implemented in September following a ruling by the Canadian International Trade Tribunal.

By 2025, Europe’s demand for Hydrotreated Vegetable Oil (HVO) or renewable diesel is expected to grow significantly, driven by two key factors:

1.Stricter Renewable Energy Mandates: Increased mandatory requirements for renewable energy use in the transportation sector are set to drive sustained demand for HVO.

2.Policy Changes in EU Member States: Adjustments to renewable fuel credit carryover regulations in countries like Germany and the Netherlands will provide new incentives for HVO market growth.

If announced expansion projects proceed as scheduled, European HVO production capacity could increase by over 400,000 tons by 2025. Most of the new facilities will have the flexibility to pivot towards the production of Sustainable Aviation Fuel (SAF), particularly Hydroprocessed Esters and Fatty Acids Synthetic Paraffinic Kerosene (HEFA-SPK). This adaptability ensures readiness to meet shifting market demands.

However, businesses aiming to import HVO into the EU will face mounting challenges. The EU is set to impose final anti-dumping duties (ADD) on HVO and biodiesel originating from China by mid-February 2025. Similar duties, along with countervailing tariffs, are already in place for HVO and biodiesel from the United States and Canada, further restricting imports.

In contrast, the United Kingdom offers a different outlook. Following the removal of HVO tariffs in 2022, HVO produced in the United States can flow freely into the UK market, presenting new opportunities for American suppliers while intensifying competition in the region.

Overall, while the European HVO market is poised for significant growth by 2025, international trade policies and regional market disparities will present notable challenges for market participants.