Ever Cat Fuels, a biodiesel producer headquartered in Isanti, Minnesota, USA, recently announced that it is shutting down all production activities and ceasing its biodiesel business operations. As a company once regarded as a pioneer in the industry, this shutdown has triggered the market to think deeply about the future development of the U.S. biodiesel industry.
Multiple factors make the business unsustainable
Ever Cat Fuels said in a statement that the main reasons for the shutdown include the following:
1. Deteriorating market conditions: Biodiesel market prices have fluctuated dramatically, and profitability has been further compressed.
2. Unstable policy support: The lack of consistency in the US government’s renewable fuels policy, especially the US Environmental Protection Agency’s (EPA) decision to include petroleum-based renewable diesel and biodiesel in the same Renewable Identification Numbers (RINs) category, further exacerbated the inequality of competition in the market.
3. Insufficient supply of feedstock: The supply chain of feedstock, such as waste vegetable oil, on which companies rely for production is unstable and difficult to support sustainable production.
4. Uncertainty in tax policy: The uncertain direction of the U.S. Department of the Treasury’s Clean Fuels Producer Tax Credit, which is due to be introduced in 2025, has further increased operational risk.
The combination of these factors makes it difficult for Ever Cat Fuels to continue to operate in the current environment.
The reality behind technological innovation
Ever Cat Fuels was founded in 2009 to produce biodiesel using the unique Mcgyan® process. Developed by inventors McNeff, Gyberg and Yan, the process relies on a non-homogeneous metal oxide catalyst for efficient, low-cost biodiesel production in a fixed-bed flow-through reactor.
Although innovative, the Mcgyan® process was ultimately unsustainable due to its limited scale of production (only 3.3 million gallons per year), as well as unfavourable market and policy environments.