Another Green Bubble Is Deflating in Biofuels

Bloomberg

Monday, July 8, 2024

After the stock market debacle for wind companies in 2023, the biofuel sector is the next deflating green bubble. The industry is battling several problems: significant cost overruns and engineering shortcomings, and a glut of biofuels as rosy forecasts for demand never materialized. Oil consumption, instead, is rising. Biofuel margins have tumbled. Neste is paradigmatic: Its market value has plunged more than 75% to about $15 billion. Green Plains Inc., one of the largest US ethanol makers, has seen its shares halve over the last year1. Others have fared worse: Several companies have either filed for bankruptcy or are teetering on the verge of collapse. Fulcrum BioEnergy Inc., an American company that raised $1 billion in funding — from BP Plc, among others — with the promise to turn waste into green jet fuel has effectively stopped operating.

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