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

Policy and regulatory environment

• Anticipates imminent policy clarification on Renewable Fuel Standard (RVO), likely within weeks or by early January, with expectations of a 50% small refinery exemption reallocation and a bullish 5.6 billion gallon mandate for 2026.

• Ongoing efforts to shape policy focus on agricultural impacts rather than climate, with trade organizations advocating for higher RVO to support farm economics.

• Administration is balancing affordability, energy needs, and farm community interests, while managing unintended consequences of tariffs and import restrictions.

• RIN prices for 2026 have risen, signaling market optimism for favorable policy outcomes.

• LCFS market expected to react in the second half of 2026 as new programs and data influence pricing.

Renewable fuels and credits

• All three renewable diesel units are operational, with supply chain preparations underway to capitalize on improved margins and anticipated positive RVO.

• 45Z tax credit monetization is progressing, with discounts improving and expectations to reach 93-95% of face value as market familiarity grows.

• SAF contracts for 2026 are largely sold out, with a mix of voluntary and export sales; business complexity is higher than anticipated due to multi-party distribution chains.

• SAF premiums are stable, and legislative efforts may further increase incentives; company is involved in policy discussions at both federal and state levels.

Feedstock, protein, and fat markets

• Fat prices have softened slightly but are expected to be at a floor, with potential for explosive feedstock demand if RVO is favorable.

• Protein segment faces trade-related volatility, especially with tariffs impacting poultry byproduct exports to Asia, but signs of improvement in trade flows are emerging.

• Seasonal trends affect fat and protein supply and pricing, with Q1 typically weaker and Q2 stronger.

• Internal supply chain lags and contract renegotiations are ongoing to optimize feed segment margins.