The US renewable diesel sector is slowing due to surging commodity and labour costs, according to a report by Bloomberg.
Proposed government blending mandates had also failed to meet industry expectations, the 8 June report said.
Against this backdrop, global agribusiness giant Cargill was quoted as saying it had suspended plans to build a giant soyabean-processing plant in Hayti, Missouri, due to “shifting market dynamics.”
Multinational energy giant Exxon Mobil Corp had also cancelled a deal to buy renewable diesel from biofuel developer Global Clean Energy Holdings (GCEH), a company that had said it was facing project delays partly due to a lack of skilled workers, Bloomberg wrote.
The suspended projects are a setback for an industry expecting a boost from US President Joe Biden’s Inflation Reduction Act, the largest investment in energy and climate in the USA, according to the report.
“Processors continue to be frustrated by delays, which include shortages of skilled construction labour, the availability of steel and unexpected cost increases brought on by supply chain issues,” John Jansen, vice president of marketing at United Soybean Board (USB), an association that represents US soyabean producers, was quoted as saying.
In May, agribusiness giant Archer Daniels Midland (ADM)’s CEO Chief Executive Juan Luciano said the expansion in renewable diesel would not be straightforward, Bloomberg wrote.
Global biofuel investments totalled US$5.9bn last year – the second-highest amount in more than a decade – according to Bloomberg New Energy Finance (BloombergNEF).