Chevron is closing factories in Iowa and Wisconsin that make truck fuel out of soybeans, corn and animal fats because government rules have made the business unprofitable, the company said this week.

Chevron’s retreat signals just how tough the clean fuels business has become as prices of the most important government-controlled credits have plunged. 

The main federal clean fuel program is called the Renewable Fuel Standard. Refiners and other fossil fuel providers have to offset their deliveries of gasoline and diesel with cleaner alternatives like biodiesel or pay for credits known as renewable identification numbers, or RINs.

The value of biodiesel RINs—the kind Chevron was earning at the factories it closed—has fallen to 48 cents a gallon from $1.61 a year ago, according to OPIS, the Oil Price Information Service.

The decline hurts factories that make clean fuels because they depend on the credits to support operations. Other low-carbon fuel credits in California, Oregon, and Washington state have also fallen in the past year.

In some ways, the price crash is the result of a success: So many companies now make clean fuels that they account for more than half the fuel used by trucks in California and will soon power all of the heavy-duty city-owned vehicles in New York. But it’s also becoming a problem for the companies that make the stuff because they may need to slow production growth to remain profitable.

Important companies in the industry include Darling Ingredients and Finnish company Neste, as well as smaller clean-fuel producers like Opal Fuels, Gevo and Calumet Specialty Products. All of their stocks are down by double-digits over the past year.

Big oil companies have also gotten involved. Chevron is one of the biggest producers, following its acquisition of Renewable Energy Group in 2022. Major refiners including Phillips 66 and Marathon Petroleum are transforming fossil fuel refineries into clean-energy plants.

The biggest problem for the industry is that the Environmental Protection Agency established renewable fuel volume rules last year that underestimated the growth of renewable fuels, according to Neville Fernandes, general manager of corporate affairs at Chevron Renewable Energy Group.

The EPA announced a renewable volume obligation—the amount of clean fuel that refiners have to make or buy—for biomass-based diesel of 2.82 billion gallons in 2023 and 3.04 billion in 2024. But producers in the U.S. made more than four billion gallons in 2023, and foreign producers exported nearly one billion gallons to the U.S., Fernandes noted.