Business cuts investments in biodiesel production amid growing use of electric cars

As experts predicted, the rapid development of electric vehicle production has significantly reduced demand for fuel, and the biofuel industry, which is heavily dependent on budget subsidies, was the first to suffer. The decline in oil prices reduces the profitability of biodiesel production, so investors are forced to stop production, which reduces demand for rapeseed, corn and sugar cane, which are raw materials for biodiesel production.

Around the world, companies continue to reduce investments in biofuel production projects, research programs and personnel, Biofuels reports.

Thus, starting June 18, more than 70 workers will be laid off at the Chevron Renewable Energy Group plant in Iowa. The staff reductions are being made against the backdrop of uncertainty in the biodiesel industry, with some biodiesel plants in Iowa remaining idle due to a lack of information about US customs policies regarding biofuels and demand volumes.

In 2024, Chevron REG closed two biodiesel plants in the Midwest due to poor market conditions caused by weak demand for biodiesel under the federal renewable fuel standard.

It recently became known that the Finnish company UPM, which operates in the forest industry, plans to stop the development of its second biomass-to-fuel plant in the port of Rotterdam.

British multinational oil and gas company BP has also halted plans to build a biofuels plant at the abandoned Kwinana plant in Australia as it expects global production of biodiesel and hydrotreated vegetable oil (HVO) to decline amid low profitability.

If American companies manage to bring models of small, closed-type nuclear reactors to the market in 2026-27, this will be a significant breakthrough in the energy sector, will provide the market with cheap energy, and will increase pressure on the biofuel and internal combustion engine vehicle markets.

In Ukraine, NNEGC Energoatom signed an agreement with the American company Holtec Int. on the possible placement of such MMRs until 2029.