172 Chevron Corp has made a significant move into the renewable fuels sector by announcing its acquisition of Renewable Energy Group Inc. for $3.15 billion. This acquisition marks Chevron’s largest investment to date in alternative fuels and underscores its commitment to reducing its carbon footprint amid increasing pressure from governments and investors to tackle climate change. Renewable Energy Group, based in Ames, Iowa, specializes in producing both biodiesel and renewable diesel. Biodiesel and renewable diesel are biofuels made from agricultural waste and specific crops grown for fuel purposes. While both use similar feedstocks, renewable diesel undergoes a refining process that makes it chemically identical to ultra-low-sulfur diesel, enhancing its compatibility and performance in existing diesel engines. Chevron’s acquisition comes at a time when many U.S. refiners are expanding their production of renewable diesel, buoyed by government subsidies aimed at decarbonizing transportation fuels. This move aligns with Chevron’s own goals to achieve net-zero operational emissions by 2050 and its recent pledge to invest $10 billion in reducing carbon emissions through 2028, with a significant portion earmarked for renewable fuels. The deal is expected to bolster Chevron’s renewable fuels production capacity, supporting its target to reach 100,000 barrels per day by 2030. It also provides Chevron with additional feedstock supplies and infrastructure, including pre-treatment facilities, which are crucial for scaling up renewable fuel production efficiently. Chevron anticipates that the transaction will enhance its earnings in the first year and contribute positively to its free cash flow following the completion of Renewable Energy Group’s Geismar expansion in Louisiana. The acquisition is slated to close in the second half of the year and has been supported by financial advisory from Goldman Sachs & Co. for Chevron and Guggenheim Securities for Renewable Energy Group. Overall, Chevron’s acquisition of Renewable Energy Group underscores its strategic shift towards renewable fuels and its proactive stance in addressing climate change concerns within the energy sector. You Might Be Interested In Amazon’s scraps an extra 2% fee for some merchants as regulators plot an antitrust lawsuit CEO Bob Iger on talks of Disney’s India exit Uber Launches Exclusive Champagne Tour Experience with Uber Bubbles in France Miami’s Airbnb Surge Raises Concerns Amid Housing Shortage Crisis Delta Air Lines’ Resilience Amid Challenges Sets Stage for Strong Recovery and Potential Growth Rivian Earnings and Revenue Beat Estimates; 2023 Production Guidance Raised