Renewable Energy Group Announces Closure of Houston Biodiesel Plant

Rhea-AI Summary

Renewable Energy Group (REGI) announced the closure of its 35 million gallon per year biorefinery in Houston, Texas, effective November 2021. The decision not to renew the plant's lease is aimed at avoiding uncompetitive fixed costs and operational challenges due to the plant's leasing agreement. REGI is working to relocate employees within its network and emphasized its commitment to executing a growth strategy focused on clean fuel solutions. The company operates 12 biorefineries across the U.S. and Europe and produced 519 million gallons of cleaner fuel in 2020.

Positive

• Focus on growth strategy in sustainable fuel solutions.
• Commitment to employee relocation within production network.
• Continues to operate 12 biorefineries, enhancing production capacity.

Negative

• Closure of Houston plant may result in job losses despite relocation efforts.
• Operational challenges from the leasing agreement affected profitability.

AMES, Iowa--(BUSINESS WIRE)-- Renewable Energy Group, Inc. (REG) (NASDAQ: REGI) today announced the closing of its 35 million gallon per year nameplate capacity facility located near Houston, Texas.

The company acquired and commissioned the plant in 2008 and has been operating it since.

“We have made the decision not to renew the lease for our REG Houston biorefinery, which would have imposed an uncompetitive fixed cost on the plant,” said REG President & CEO Cynthia ‘CJ’ Warner. “The plant has run very well but has always been relatively challenged due to its leasing agreement coupled with a lack of REG’s hallmark multi-feedstock processing capability.”

The company is currently working with plant employees on relocation opportunities within the production network. The company will completely shut down the Houston plant in November 2021.

“It is never an easy decision to shut down a plant. We greatly appreciate the team at REG Houston for their dedication to safety and operational excellence,” said Warner. “Within our larger system, we remain focused on executing our growth strategy and we will continue to work with our existing customers and vendors to provide clean fuel solutions that are delivering meaningful carbon reduction today.”

About Renewable Energy Group

Renewable Energy Group, Inc. is leading the energy and transportation industries’ transition to sustainability by transforming renewable resources into high-quality, sustainable fuels. Renewable Energy Group is an international producer of sustainable fuels that significantly lower greenhouse gas emissions to immediately reduce carbon impact. Renewable Energy Group utilizes a global integrated procurement, distribution and logistics network to operate 12 biorefineries in the U.S. and Europe. In 2020, Renewable Energy Group produced 519 million gallons of cleaner fuel delivering 4.2 million metric tons of carbon reduction. Renewable Energy Group is meeting the growing global demand for lower-carbon fuels and leading the way to a more sustainable future.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the expected timing and success of the closure of our Houston facility and our ability to execute on our growth strategy. These forward-looking statements are based on current expectations and assumptions and are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, our ability to successfully close the Houston facility and other risks described in REG's annual report on Form 10-K for the year ended December 31, 2020, quarterly reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021, and from time to time in REG's other periodic filings with the SEC. All forward-looking statements are made as of the date of this press release and we do not undertake to update any forward-looking statements based on new developments or changes in our expectations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210929005734/en/

Katie Stanley

katie.stanley@regi.com

515-239-8184

Source: Renewable Energy Group, Inc.

FAQ

What is the reason for the closure of the REGI Houston facility?

REGI decided not to renew the lease due to uncompetitive fixed costs and operational challenges.

When will the REGI Houston plant be fully shut down?

The Houston plant will completely shut down in November 2021.

How many biorefineries does REGI operate?

Renewable Energy Group operates 12 biorefineries in the U.S. and Europe.

What was REGI's production volume in 2020?

In 2020, REGI produced 519 million gallons of cleaner fuel.

How does REGI support employee relocation after the plant closure?

REGI is actively working with plant employees on relocation opportunities within its production network.