Darling Ingredients Inc. announced on December 4, 2025 that it has entered into an agreement to sell approximately $60 million of production tax credits generated under the Inflation Reduction Act by its Diamond Green Diesel joint venture. The sale is expected to close by December 31, 2025, subject to customary funding conditions.
The transaction follows a September sale of $125 million in tax credits, bringing the company’s total monetization of IRA‑generated credits for 2025 to $185 million. The proceeds will be used to bolster cash reserves and support the company’s ongoing balance‑sheet deleveraging program, which has been a key focus for management amid a $4.0 billion debt load and a leverage ratio of 3.93× as of the end of 2024.
Management highlighted the strategic importance of the sale in a statement: “The continued availability of IRA‑based production tax credits, combined with the strong performance of our Diamond Green Diesel joint venture, provides a timely opportunity to convert these incentives into liquidity. This will help us reduce debt and maintain flexibility as we expand our renewable‑fuel portfolio.” The CEO also noted that rising fat prices and the Clean Fuel Production Credit are expected to further enhance the value of domestic feedstocks.
Analysts reacted positively to the announcement, with several firms upgrading Darling Ingredients to “buy” and raising price targets. The upgrades were driven by the company’s demonstrated ability to monetize policy‑driven incentives, the robust outlook for renewable diesel and sustainable aviation fuel demand, and the company’s disciplined approach to debt reduction. The market view is that the sale signals strong execution and a clear path to improved financial health.
The transaction underscores both tailwinds and headwinds for the company. On the upside, the Inflation Reduction Act continues to provide significant incentives for low‑carbon fuel production, and the company’s joint venture with Valero is positioned to capture a growing share of the SAF market. Headwinds include regulatory uncertainty around future policy changes and potential margin pressure in the renewable diesel segment. Nonetheless, the sale of tax credits is a concrete step toward strengthening liquidity and supporting the company’s long‑term growth strategy.
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.