REG: Biodiesel, renewable diesel demand remains strong

• <img src="http://biomassmagazine.com/uploads/posts/web/2020/08/resize/REGQ22020_15967506001645-300×300-noup.jpg" title="SOURCE: Renewable Energy Group Inc.
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Renewable Energy Group Inc. released second quarter financial results on Aug. 4, reporting that demand for biodiesel and renewable diesel has remained stable despite the COVID-19 pandemic. Production of both products was up when compared to the same period of last year.

REG produced 132 million gallons of biodiesel and renewable diesel during the second quarter, an increase of 4 percent. Renewable diesel production at the company’s Giesmar plant increased 17 percent.

During the company’s second quarter earnings call, Cynthia Warner, president and CEO of REG, said the pandemic caused a significant drop in fuel demand, with demand for jet fuel down 62 percent, demand for gasoline down 30 percent, and demand for diesel down approximately 16 percent. Within that context, Warner said it is notable that demand for biodiesel and renewable diesel remained stable during the quarter, which she said was supported by the continued desire for more lower-carbon intensity fuels. Moving forward, REG expects demand for biodiesel and renewable diesel to remain robust.

Warner said growth in renewable diesel remains an important element of the company’s strategy and confirmed that engineering work is continuing for a 250 million gallon renewable diesel plant. She said site selection and associated commercial agreements are progressing, with startup planned for 2023.

Revenues for the second quarter were $546 million on 183 million gallons of fuel sold. Net income from continuing operations available to common stockholders was $1 million in the second quarter of 2020, compared to a net loss of $58 million in the second quarter of 2019. The net loss in the second quarter of 2019 does not include the biodiesel mixture excise tax credit (BTC) allocation, which was retroactively reinstated in December 2019. Adjusted EBITDA in the second quarter was $8 million, compared to $36 million in the second quarter of 2019 including the allocation of the BTC.