Darling Ingredients Inc. has monetized $50 million of production tax credits generated by its Diamond Green Diesel joint venture, raising the company’s total 2025 credit sales to $235 million. The credits are earned under the Inflation Reduction Act’s 45Z clean‑fuel production program and were sold to a private investor group that will provide immediate cash to the company.
The sale underscores the strategic importance of the Diamond Green Diesel partnership, a 50/50 joint venture with Valero Energy that produces renewable diesel and sustainable aviation fuel. By converting the credits into cash, Darling Ingredients reduces its balance‑sheet exposure to the volatile renewable‑fuel market while preserving the long‑term value of the credits for future use or resale.
Financially, the transaction improves liquidity and provides a buffer against potential margin compression in the Fuel Ingredients segment. It follows earlier sales of $125 million announced on September 29 and $60 million announced on December 4, illustrating a deliberate strategy to monetize credits as they mature. The cash infusion also supports ongoing investments in the company’s core Feed and Food segments, which have shown robust growth in Q3 2025.
Management highlighted the move as part of a broader focus on cost discipline and strategic capital allocation. CEO Randall C. Stuewe noted that the credits “provide a valuable source of liquidity that can be deployed to strengthen the company’s core businesses while mitigating risk in the renewable‑fuel space.” CFO Bob Day added that the sale reflects the company’s cautious stance amid regulatory uncertainty surrounding future renewable‑fuel margins.
Looking ahead, Darling Ingredients expects the remaining credits to continue generating cash flow, while the company maintains a positive outlook for its core ingredient businesses. The company’s guidance for the remainder of 2025 remains unchanged, but the credit sales position it to navigate potential headwinds in the renewable‑fuel market without compromising growth in its more stable segments.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.