This month I’m introducing a regular feature for readers: The Executive Exchange, an occasional interview feature with senior leaders across transport energy, fuels, policy, capital, and infrastructure. The goal is to bring more executive-level perspective into the newsletter: not just what is happening in the market, but how people with direct experience are thinking about risk, investment, policy and execution. For the first installment, I spoke with Bruce Comer about renewable fuels, capital discipline and where he sees durable value in a market that is becoming more selective.
Q: The biofuels market seems to be splitting: some ethanol assets are gaining value because they can lower carbon intensity, while parts of biodiesel and renewable diesel are under real pressure. What does that split tell you about where capital still sees durable value in renewable fuels?
A: The North American biofuels industry is moving into another phase, and capital is becoming more selective. The assets that look most durable are those that can compete economically while also capturing policy value, especially through lower carbon intensity.
Ethanol is a good example. We are now in the 45Z and 45Q era, and those policies have substantially increased the value of ethanol assets that can lower their carbon footprint. Plants with direct-inject carbon capture capabilities or access to carbon capture pipelines are positioned to monetize those credits. At 45Z/45Q values of roughly $0.10 to $0.20 per gallon, the benefit can be very meaningful for owners of large fleets of plants. Green Plains, for example, expects to generate $200 million to $225 million from 45Z credits in 2026, while The Andersons has projected an annual 45Z contribution of $90 million to $100 million from 2026 through 2029.
There are other tailwinds as well. U.S. ethanol exports reached 2.2 billion gallons in 2025, an all-time record, and exports remain important to overall supply-demand balance. If oil prices remain elevated because of instability in the Middle East or other geopolitical factors, ethanol’s price competitiveness could also improve. So, for ethanol, there are several reasons capital can still see durable value: carbon intensity reduction, tax credit monetization, exports, and price competitiveness.
Biomass-based diesel is more mixed. The new RVO numbers should benefit the sector by increasing demand, and higher petroleum diesel prices can improve competitiveness. But there is still underlying overcapacity if all plants are operating.
Within that category, biodiesel and renewable diesel are in different positions. Integrated biodiesel producers are better able to compete because of scale and integration, while many independent producers have throttled down or stopped production over the past couple of years. Some have restarted, but it is not yet clear how many will ultimately come back. Renewable diesel capacity, by contrast, is largely controlled by obligated parties. Many of those owners view renewable diesel as a compliance generator, although margins are currently strong.
So the split tells me that capital is not leaving renewable fuels, but it is becoming more disciplined. It is favoring assets with policy durability, carbon-reduction value, scale, market access, and some ability to withstand margin volatility.
Q: A lot of renewable fuel policy assumes that if government creates the incentive, the market will follow. From what you are seeing, where is that assumption holding up, and where is it breaking down?
A: It depends on the fuel.
For ethanol, the market case is stronger because ethanol is not only policy-driven. Refiners have built their operations around an E10 blend, and ethanol has economic value because of its octane and price performance. The strength of U.S. ethanol exports also shows that the fuel can compete in global markets. If gasoline prices rise or petroleum supply becomes tighter, ethanol’s economic attractiveness improves further.
Biobased diesel is more dependent on policy. Renewable diesel, biodiesel, and SAF-related pathways rely heavily on the RVO, 45Z, and supporting policy frameworks. That does not mean the market is weak, but it does mean policy stability matters more. There are still a few 45Z details being finalized, but the basic outline is now clearer, and the industry appears to have a relatively stable policy outlook for the next 18 to 24 months. That is helpful for producers.
So I would not say the incentive model is failing. I would say it works best where policy support reinforces an underlying market advantage. Where the fuel depends more heavily on compliance value or tax credits, the market is more exposed to policy shifts, margin pressure, and capacity cycles.
Q: If you were advising an executive or board looking at renewable fuels today, what would you tell them to watch most closely over the next 12 to 24 months: policy, margins, feedstocks, technology, consolidation, or something else?
A: Policy, margins, feedstocks, and consolidation all matter, but over the next 12 to 24 months I would put geopolitical energy risk near the top of the list.
Right now, the policy outlook is relatively stable. The larger variable may be the situation in the Middle East and its effect on energy supply, demand, trade flows, and prices. If petroleum molecules become more expensive or less available, that can create an opportunity for biofuels, especially fuels that are already integrated into the market and can compete on price.
That said, executives and boards should still watch the fundamentals closely. Policy can create value, but it does not eliminate the need for disciplined capital allocation. The strongest renewable fuels opportunities will be those that combine policy support with real market demand, competitive cost structure, reliable feedstock access, and a clear path through margin volatility.
Bruce Comer is the founder and a Managing Director of Ocean Park. He has decades of experience advising boards, funds, owners and lenders on capital structures, acquisitions, divestitures, restructurings and operational issues. Prior to founding Ocean Park, he was a Principal at Platinum Equity, where he played a key role in raising the firm’s $700 million fund. He also previously served as the Chairman and CEO of Allegro Biodiesel, a publicly-traded company. Bruce has published articles in industry journals, and appeared at conferences and on CNBC to discuss renewable fuels. Bruce received his Bachelor’s Degree, cum laude, from the Woodrow Wilson School of Public and International Affairs at Princeton University; a Master’s Degree with Distinction in International Relations from Johns Hopkins University; and an MBA in Finance from The Wharton School.
