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An Ames, Iowa-based biodiesel production company recently announced in will close its Seabrook facility.
On Sept. 29, Renewable Energy Group (REG) said that it will close its 35 million gallon per year nameplate capacity facility in the city.
REG President and CEO Cynthia ‘CJ’ Warner said the company decided to shut down operations due to an impending enforced uncompetitive fixed cost.
“We have made the decision not to renew the lease for our REG Houston biorefinery, which would have imposed an uncompetitive fixed cost on the plant. The plant has run very well but has always been relatively challenged due to its leasing agreement coupled with a lack of REG’s hallmark multi-feedstock processing capability,” according to Businesswire.
The company has been at its Seabrook location for 12 years and is in stages of relocating plant employees to other areas within its production system, according to Businesswire.
Warner said that the decision to cease operations was not one that the company took lightly.
“It is never an easy decision to shut down a plant. We greatly end operations in November for their dedication to safety and operational excellence,” said Warner. “Within our larger system, we remain focused on executing our growth strategy and we will continue to work with our existing customers and vendors to provide clean fuel solutions that are delivering meaningful carbon reduction today.”
The plant plans to end operations in November, continuing a growing trend of biodiesel plant shutdowns, according to S&P Global Platts.
S&P is a provider of energy and commodities information and reported that, “Biodiesel capacity has been dropping due to rising feedstock costs, as biodiesel vies for supply against the rising production of 'drop in' fuels like renewable diesel, or RD. Soybean oil has been a mainstay for both fuels as a feedstock but beef tallow is also used."