Delek idles three biodiesel plants

US independent refiner Delek is temporarily idling three biodiesel plants in Texas, Arkansas and Mississippi as it explores alternative uses for the sites.

The refiner's Crossett, Arkansas, Cleburne, Texas, and New Albany, Mississippi, plants produce a combined 2,600 b/d of biodiesel from feedstocks such as cooking oil, fats, greases and vegetable oils such as soybean and canola oil.

The company reported a $22mn impairment in its second quarter earnings released today as it temporarily idles the plants and explores "viable and sustainable alternatives".

Delek did not disclose when the facilities were idled, but noted the decision was driven by a "decline in the overall biodiesel market".

US biodiesel producers are facing worsening production economics, as evidenced by a deteriorating correlation between the soybean oil-heating oil (BOHO) spread and biomass-based diesel D4 renewable information number (RIN) credits.

Although a relatively small amount of production, Delek idling its biodiesel plants follows several refiners pivoting away from prior investments in renewable fuels.

Chevron said earlier this year it was closing indefinitely two biodiesel plants in Wisconsin and Iowa due to market conditions.

US specialty refiner Vertex plans to pause renewable fuels production at its 88,000 b/d Mobile, Alabama, refinery by the end of the year, returning a converted hydrocracker predominantly making renewable diesel to produce what it says are wider-margin fossil fuel products.

By Nathan Risser