A Fresno, California-based biodiesel producer just locked in one of the most significant deals in the independent biodiesel space. And the entire operation runs on used cooking oil.
Eslinger Biofuels has announced a five-year, $48 million off-take and credit monetization agreement with STX Group, one of the world's leading environmental commodities firms with offices in 13 markets globally. Under the deal, STX Group takes exclusive forward purchase rights across Eslinger's full compliance credit stack, including D4 RINs under the federal Renewable Fuel Standard, California LCFS credits, and 45Z Clean Fuel Production Credits. At current market rates, the partnership is projected to generate roughly $9.3 million in annual gross credit revenue.
This is not a small refinery scraping by. This is institutional capital backing a UCO-based biodiesel producer for the long term.
Why this deal matters for the UCO industry
The most important detail in this announcement is not the dollar amount. It is the supply chain behind it.
Eslinger Biofuels controls its own feedstock from collection through refining. The company sources ultra-low carbon intensity used cooking oil through a wholly owned collection operation spanning California, Nevada, and Arizona. That vertical integration, from the restaurant grease bin to the refinery to the credit market, is what made the deal possible.
Few biodiesel producers in North America can make that claim. Most rely on third-party feedstock procurement. Eslinger built the collection infrastructure in-house, giving the company direct control over feedstock quality and carbon intensity. That control is what enables the company to consistently generate the maximum federal and state compliance credits available per gallon of fuel produced.
STX Group, a firm with over 25 years in environmental commodities trading, saw enough value in that model to commit to a five-year exclusive. That is a strong signal to the rest of the industry about how valuable a vertically integrated UCO-to-biodiesel operation has become.
What Eslinger Biofuels is actually producing
Eslinger produces premium-grade, distilled B100 biodiesel that meets CARB specifications, the most demanding diesel fuel standards in North America. The product serves over-the-road transportation, commercial fleets, marine, and aviation markets. Customers include TA Travel Centers, one of the largest travel center networks in the country.
The company's Fresno facility is CARB-certified and has received $7.1 million in grants from the California Energy Commission, including $6 million for the core refinery build-out and $1.2 million for a solar energy and EV charging installation at the terminal site.
The operation currently produces 5 million gallons per year. A facility expansion is confirmed for 2028, which will add renewable diesel and sustainable aviation fuel production while maintaining full B100 output. The vision is for the Fresno terminal to become the leading inland clean fuel port for California's Central Valley and the broader West Coast market.
The bigger picture for UCO collectors and processors
This deal is a case study in where the UCO industry is heading.
California has lost more than 300,000 barrels per day of refining capacity since 2020. That is a structural gap in fuel supply that creates real opportunity for clean fuel producers. And the feedstock that powers those producers is used cooking oil.
When a global commodities firm with 13 offices worldwide commits $48 million over five years to a single biodiesel facility, and that facility runs exclusively on UCO, it validates the entire collection side of the business. It confirms that the grease you pick up from restaurants is not just waste. It is a compliance asset with measurable, monetizable value in credit markets that institutional investors are now backing with real capital.
For independent UCO collectors, this story illustrates a few things worth paying attention to.
First, vertical integration matters. The collectors who control their own supply chain from pickup to processing to sale are building the most defensible businesses in this space.
Second, credit markets are becoming the real profit center. The $48 million in this deal is not coming from fuel sales alone. It is coming from D4 RINs, LCFS credits, and 45Z credits. The compliance value stacked on top of every gallon of UCO-based biodiesel is what makes these deals possible.
Third, California remains the most valuable market for low-CI feedstock. With CARB's strict standards, the LCFS program, and the state's shrinking refinery capacity, UCO collected in California, Nevada, and Arizona carries some of the highest compliance value in the country.
The bottom line
Eslinger Biofuels just proved that a vertically integrated UCO collection and biodiesel production model can attract institutional-grade capital and long-term offtake commitments from global commodities firms. The $48 million, five-year deal with STX Group is one of the strongest signals yet that the market sees used cooking oil not as waste, but as a high-value compliance asset with a durable future.
For UCO collectors and grease processors, the direction is clear. The value of what you collect keeps going up. The buyers are getting bigger. And the deals are getting longer.
