Despite Tough Year in Biofuels, Few Plants Changed Hands Last Year

DTN writer Todd Neeley reported last last month that, “Despite the biofuels industry operating on thin margins and dealing with federal policy uncertainty in 2019, the number of mergers and acquisitions in the industry was historically low last year, according to a new report from an investment bank focused on biofuels transactions.

“Overproduction in the ethanol industry, as well EPA’s continued issuance of small-refinery exemptions last year, led to the idling of at least 20 ethanol plants. The biodiesel industry struggled as well from the expiration of the biodiesel blenders tax credit and SREs.

“According to a report from Ocean Park, based in Los Angeles, the industry continued to hold on to assets despite all the struggles in 2019.”

The DTN article noted that, “‘No large-scale, operating biofuels plants changed hands — which is rare for the biofuels M&A market,’ Ocean Park said.

Just four operating biodiesel, ethanol and advanced biofuels plants, combined, were sold in 2019, with a combined capacity of just 133 million gallons per year.

“Ocean Park said the remainder of merger and acquisition activity involved what the bank said was ‘sub-scale, idled or non-operating plants’ as well as technology assets.”

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