Biofuels projects around the world are facing sharp cutbacks as companies scale back investments, halt research programs, and lay off workers in response to weakening market conditions, reports UkrAgroConsult.
In the United States, Chevron Renewable Energy Group’s plant in Ames, Iowa, is preparing to lay off more than 70 employees starting June 18. The move comes as Iowa’s biodiesel industry struggles with unclear state tax policies and reduced demand. Chevron REG has already closed two of its biodiesel plants in the Midwest this year, citing poor demand and weak support under the federal Renewable Fuel Standard.
The downturn isn’t limited to the U.S. Last week, Finnish company UPM announced it will stop developing plans for a second biomass-to-fuel plant at the port of Rotterdam. Meanwhile, British energy giant BP has suspended a similar project at its former Kwinana refinery site in Australia.
Global production of biodiesel and hydrotreated vegetable oil (HVO) is expected to decline this year, as shrinking profit margins make the sector less attractive to investors.
This trend signals growing challenges for the biofuels sector, even as renewable energy continues to expand in other areas like wind and solar. Industry experts point to the need for clearer policy frameworks and improved economic conditions to help stabilize investment in cleaner fuel alternatives.
