Darling Ingredients (DAR) Jefferies Renewables & Clean Energy Conference summary

Policy and regulatory environment

• Ongoing uncertainty around 45Z credits, with conflicting reports and no final guidance yet; company remains agnostic but expects global mandates to sustain margins regardless of subsidies.

• Blender's tax credit (BTC) extension is under discussion, but any retroactive move would likely be tied to a larger tax package, possibly in summer or fall.

• RVO (Renewable Volume Obligation) guidance is expected to see modest increases, with bipartisan support for biofuels due to their importance to U.S. agriculture.

• Carbon intensity calculations for 45Z may be adjusted to favor domestic agriculture, benefiting U.S. producers if foreign biofuel producers are excluded.

Feedstock and supply chain dynamics

• Feedstock prices remained flat to slightly down in 2024 due to inconsistent capacity utilization and changing global trade flows.

• U.S. biofuel imports are expected to drop by nearly a billion gallons in 2025, tightening domestic fat supplies and increasing demand for North American feedstocks.

• Global shifts include higher biofuel mandates in Brazil and changes in palm oil cycles, leading to a major dislocation in global fat and oil markets.

• Tariffs on Chinese used cooking oil (UCO) could disrupt imports, but the company is positioned to benefit domestically if tariffs are imposed.

Segment performance and margin outlook

• Feed segment margins are expected to normalize in the 23–24% range, with ongoing contract renegotiations and procurement improvements in all regions.

• Meat production is projected to increase globally over the next decade, supporting long-term feed segment growth.

• 2025 guidance assumes improved core business performance, with margin normalization expected as market volatility subsides.