Darling Ingredients Inc. (NYSE:DAR) saw its stock fall by as much as 9% on concerns surrounding potential changes to U.S. biofuel blending regulations, before trimming losses to trade around 6.7% lower by midmorning.
Investor anxiety was triggered by news that the Environmental Protection Agency’s proposed Renewable Volume Obligations (RVOs) are now being reviewed by the White House Office of Management and Budget. The finalized mandates – expected within the next month – could reshape the cost structure for biofuel producers by altering how much renewable fuel must be blended into the nation’s fuel supply.
The regulatory uncertainty has cast a shadow over companies like Darling Ingredients, which rely heavily on stable policy and feedstock pricing to maintain profitability in the volatile biofuels market.
Further pressure came from comments made by CEO Randall Stuewe during a BMO conference earlier this week. Stuewe highlighted that sector margins have tightened due to a wave of lower-cost biofuels and feedstocks entering the market from Asia – raising fresh concerns about competition and input costs.
As market participants await more clarity on the finalized quotas, Darling’s share price reflects investor caution amid a potentially shifting regulatory and competitive landscape. The company’s future margins and feedstock sourcing may be significantly impacted depending on how the new rules take shape.