US multinational energy corporation Chevron has announced it is set to acquire biofuel producer Renewable Energy Group (REG).

The agreement combines REG’s renewable fuels production and feedstock capabilities with Chevron’s manufacturing, distribution and commercial marketing activities, according to the 28 February announcement.

“Together, we can grow more quickly and efficiently than either could on its own,” Chevron chairman and CEO Mike Wirth said.

Chevron said the acquisition would help the company achieve its goal of increasing its renewable fuels production capacity to 100,000 barrels/day by 2030 and would also bring additional feedstock supplies and pre-treatment facilities. Part of that growth would come from REG’s current expansion at its existing renewable diesel plant in Geismar, Louisiana, and Chevron’s project to convert its El Segundo refinery in California to renewable diesel production.

The agreement was expected to be finalised in the second half of this year and was subject to regulatory approval and REG shareholder approval, Chevron said.

Following the acquisition, Chevron’s renewable fuels business, Renewable Fuels - REG, would be headquartered in Ames, Iowa, the company said.

Chevron produces crude oil and natural gas, and manufactures transportation fuels, lubricants, petrochemicals and additives

US-headquartered REG is one of the largest biodiesel producers in North America, and a leading biodiesel firm globally. The company operates nine bio-refineries in the USA and two in Europe. In 2020, REG said it produced 1.7M tonnes of biofuels, delivering 4.2M tonnes of carbon reduction.