FutureFuel Announces Certain Matters with Respect to Its Biodiesel Production

Rhea-AI Summary

FutureFuel Corp. (NYSE: FF) announced significant delays in its Biodiesel production operations. The company's scheduled annual maintenance and turnaround of its Biodiesel plant, which began in late December 2024, has proven more extensive than anticipated and is expected to continue through February 2025. No Biodiesel production will occur until the turnaround is complete.

Adding to the complexity, the Blenders' Tax Credit (Section 40A) expired on December 31, 2024, and has been replaced by the producer's tax credit (IRA 45Z) effective January 1, 2025. However, insufficient details from government agencies regarding IRA 45Z implementation have created industry-wide uncertainty, causing multiple Biodiesel producers to suspend operations. FutureFuel is monitoring the situation to determine its future approach to Biodiesel production.

Positive

• None.

Negative

• Extended plant maintenance causing production halt through February 2025
• Uncertainty surrounding new IRA 45Z tax credit implementation
• Loss of previous Blenders' Tax Credit support
• Industry-wide disruption causing producers to go offline

Insights

Renewable Energy Industry Analyst

FutureFuel's latest announcement signals substantial operational and regulatory headwinds that warrant careful attention. The extended maintenance turnaround, initially planned as a routine annual procedure, now represents a more complex challenge that will result in a complete production halt through February 2025. This prolonged downtime comes at a particularly sensitive moment for the biodiesel industry.

The timing coincides with a critical transition in federal support mechanisms. The expiration of Section 40(A) Blenders' Tax Credit and its replacement with the IRA 45Z producer's tax credit creates a significant regulatory vacuum. The lack of clear implementation guidelines from government agencies has triggered a cascading effect across the industry, with multiple producers suspending operations. This industry-wide disruption could reshape market dynamics and competitive positions.

The confluence of these events presents both challenges and strategic opportunities. While the extended maintenance period will impact Q1 2025 production volumes, it provides FutureFuel with flexibility to adapt to the new regulatory framework once clarified. The company's cautious approach to resuming production reflects broader industry uncertainty about the economic viability of operations under the new tax credit structure.

Market implications extend beyond immediate operational concerns. With multiple producers going offline, we could see significant shifts in supply-demand dynamics, potentially leading to price volatility in the biodiesel market. The situation underscores the industry's dependence on regulatory support and highlights the need for clear policy frameworks to maintain stable production environments.

 CLAYTON, Mo., Jan. 31, 2025 (GLOBE NEWSWIRE) --  FutureFuel Corp. (NYSE: FF) (“FutureFuel” or the “Company”), a manufacturer of custom and performance chemicals and biofuels, today announced certain matters with respect to its Biodiesel production.

FutureFuel initiated its scheduled annual maintenance and turnaround of its Biodiesel plant at the end of December 2024. This turnaround has proven more extensive than expected. Therefore, the Company currently believes the turnaround will continue through February 2025. Biodiesel production will not commence until this turnaround is complete.

Biodiesel production has been enabled through the support of Section 40(A), the Blenders’ Tax Credit, which expired on December 31, 2024. This key incentive program has been replaced by a producer's tax credit, IRA 45Z, which became effective January 1, 2025. However, the applicable government agencies have not yet published sufficient details of the IRA 45Z. This creates a level of uncertainty for the Biodiesel industry which has caused other Biodiesel producers and their capacity to go offline. The Company will be closely monitoring this as it considers its approach to Biodiesel production and its role in the biofuels market.

About FutureFuel

FutureFuel is a leading manufacturer of diversified chemical products and biofuels. FutureFuel’s chemicals segment manufactures specialty chemicals for specific customers (“custom chemicals”) as well as multi-customer specialty chemicals (“performance chemicals”). FutureFuel’s custom manufacturing product portfolio includes proprietary agrochemicals, adhesion promoters, a biocide intermediate, and an antioxidant precursor. FutureFuel’s performance chemicals products include a portfolio of proprietary nylon and polyester polymer modifiers and several small-volume specialty chemicals and solvents for diverse applications. FutureFuel’s biofuels segment primarily produces and sells biodiesel to its customers. Please visit www.futurefuelcorporation.com for more information.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements deal with FutureFuel’s current plans, intentions, beliefs, and expectations, and statements of future economic performance. Statements containing such terms as “believe,” “do not believe,” “plan,” “expect,” “intend,” “estimate,” “anticipate,” and other phrases of similar meaning are considered to contain uncertainty and are forward-looking statements. In addition, from time-to-time FutureFuel or its representatives have made or will make forward-looking statements orally or in writing. Furthermore, such forward-looking statements may be included in various filings that the company makes with United States Securities and Exchange Commission (the “SEC”), in press releases, or in oral statements made by or with the approval of one of FutureFuel’s authorized executive officers.

These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, those set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in FutureFuel’s Form 10-K Annual Report, as amended for the year ended December 31, 2023, and in its future filings made with the SEC. An investor should not place undue reliance on any forward-looking statements contained in this document, which reflect FutureFuel management’s opinions only as of their respective dates. Except as required by law, the company undertakes No obligation to revise or publicly release the results of any revisions to forward-looking statements. The risks and uncertainties described in this document and in current and future filings with the SEC are not the only ones faced by FutureFuel. New factors emerge from time to time, and it is not possible for the company to predict which will arise. There may be additional risks not presently known to the company or that the company currently believes are immaterial to its business. In addition, FutureFuel cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. If any such risks occur, FutureFuel’s business, operating results, liquidity, and financial condition could be materially affected in an adverse manner. An investor should consult any additional disclosures FutureFuel has made or will make in its reports to the SEC on Forms 10-K, 10-Q, and 8-K, and any amendments thereto. All subsequent written and oral forward-looking statements attributable to FutureFuel or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this document.

COMPANY CONTACT
FutureFuel Corp.
Roeland Polet
(314) 854-8352
www.futurefuelcorporation.com

FAQ

When will FutureFuel (FF) resume biodiesel production after maintenance?

FutureFuel expects to resume biodiesel production after February 2025, following completion of their extended maintenance and turnaround period.

How is the IRA 45Z tax credit affecting FutureFuel's biodiesel operations?

The lack of detailed guidelines for the new IRA 45Z producer's tax credit, which replaced the Blenders' Tax Credit on January 1, 2025, has created uncertainty for FutureFuel's biodiesel operations.

What caused FutureFuel's biodiesel plant maintenance to extend into 2025?

The scheduled annual maintenance and turnaround that began in December 2024 proved more extensive than initially expected, requiring an extended period through February 2025.

How has the expiration of the Blenders' Tax Credit impacted FF's biodiesel business?

The expiration of the Blenders' Tax Credit on December 31, 2024, combined with uncertainty around its replacement (IRA 45Z), has contributed to industry-wide disruption with producers going offline.