FutureFuel to idle biodiesel production amid tax credit uncertainty

CLAYTON, Mo. - FutureFuel Corp. (NYSE:FF), a specialty chemicals company with a market capitalization of $190 million and a current ratio of 4.7, announced Tuesday it will temporarily idle its biodiesel production after completing remaining contractual obligations by the end of June, despite recent EPA proposals to increase biomass-based diesel mandates. According to InvestingPro analysis, the company maintains strong liquidity with cash exceeding debt levels.

The company cited lack of clarity regarding the Clean Fuel Producers Tax Credit (IRA 45Z), which was intended to replace the expired $1 per gallon Blenders Tax Credit, as the primary reason for the suspension. Despite current challenges reflected in its negative EBITDA of -$5.74 million, FutureFuel has maintained its dividend payments for 18 consecutive years, currently yielding 5.71%.

"We welcome the EPA’s proposed increase in biomass-based diesel mandates and thank all who supported this positive change," said Roeland Polet, CEO. "Unfortunately, without clarity on the Clean Fuel Producers Tax Credit, FutureFuel has determined it must temporarily idle its biodiesel production for the time being."

The EPA recently proposed increasing biomass-based diesel mandates for 2026 and 2027 to 7.12 and 7.50 billion Renewable Identification Numbers respectively, up from 3.35 billion gallons in 2025 and 5.36 billion gallons in 2026.

FutureFuel stated it remains committed to biodiesel production and plans to restart operations when regulatory conditions improve. In the interim, the company will redirect capacity to support growth in its specialty chemicals business.

The company’s Batesville facility can switch between specialty chemicals and biodiesel production, a capability that distinguishes it from other biodiesel producers. FutureFuel also expects new product capacity at its facility to come online in mid-2025.

According to the press release statement, FutureFuel is actively pursuing chemical projects for the second half of 2025 and 2026. InvestingPro analysis suggests the company’s stock is currently trading near its Fair Value, with analysts expecting EPS to reach $0.58 in FY2025. Get detailed insights and 12 additional ProTips about FutureFuel’s financial outlook with an InvestingPro subscription.

In other recent news, FutureFuel Corp. has expanded its Board of Directors to include a ninth member, appointing Pamela R. Butcher as a Class C director. This strategic move aligns with the company’s growth initiatives in the chemical and biofuel sectors. Ms. Butcher brings a wealth of experience from her previous roles in business management and marketing within the chemical industry. Her extensive background includes leadership positions at J.M. Huber Corporation and Pilot Chemical Corp., as well as past board service with companies like Arch Resources, Inc. and PDC Energy, Inc. She has also held senior roles at The Dow Chemical Company during her nearly 30-year tenure there. As part of her compensation package, Ms. Butcher will receive pro-rated director compensation for 2024 and an option to purchase 10,000 shares of FutureFuel’s common stock, which expires in April 2030. This appointment reflects FutureFuel’s commitment to enhancing its leadership team with experienced professionals.

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