Darling Ingredients Inc. (DAR): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear, no-nonsense breakdown of the forces shaping Darling Ingredients Inc. (DAR) right now. As a seasoned analyst, I can tell you the core story for 2025 is a strong, resilient ingredients business compensating for a volatile renewable fuel market driven by policy uncertainty. Here is the PESTLE analysis, grounded in the latest fiscal year data.

Political Factors: The Policy-Driven Volatility

The biggest near-term risk for Darling Ingredients Inc. is policy uncertainty, defintely in the US fuel segment. The delays by the Environmental Protection Agency (EPA) on Renewable Volume Obligations (RVOs) keep the biofuel market on edge, making it tough to forecast margins for their Diamond Green Diesel (DGD) joint venture.

Still, the company's Fuel segment relies heavily on the US Inflation Reduction Act (IRA) tax credits. This is a massive tailwind, but it ties a significant portion of future profitability to political stability. Also, keep an eye on global tariff volatility, especially from China and the APAC region, because that directly impacts the export pricing for their protein products. Political risk is now a margin risk.

Action: Model three scenarios for the Fuel segment based on RVO and IRA continuity.

Economic Factors: Ingredients as the Anchor

The economics of Darling Ingredients Inc. show a clear split: a stable, growing core ingredients business and a volatile, high-potential fuel business. The core ingredients business-food, feed, and fuel feedstock-is the anchor, with Adjusted EBITDA projected at a solid $875-900 million for the full-year 2025. This is the bedrock of the company.

The Fuel segment, however, is pressured by volatile prices for RINs (Renewable Identification Numbers) and LCFS (Low Carbon Fuel Standard) credits. Here's the quick math: while Q3 2025 total net sales reached $1.6 billion, the margin quality is highly dependent on those credit prices. The good news is they are monetizing $125 million of 2025 Production Tax Credits (PTC), which is a direct cash injection to offset some of the fuel market choppiness. Raw material price fluctuations, like stronger fat prices in early 2025, also affect the ingredients margins, but the diversification helps.

Action: Track the spread between feedstock cost and RIN/LCFS credit prices weekly.

Sociological Factors: The Sustainability Premium

Consumer behavior is directly boosting Darling Ingredients Inc.'s Food and Feed segments. There is a strong, growing demand for sustainable ingredients, which is exactly what the company provides through its circular economy model. This isn't a niche anymore; it's mainstream.

Plus, the focus on health and wellness is driving demand for collagen and gelatin, a key part of their portfolio. The company is smart to lean into this trend, even partnering with the National FFA Organization to support the next generation of sustainable agriculture leaders. This focus on circular economy solutions and waste reduction aligns perfectly with rising public and corporate pressure. Your customers want this story.

Action: Highlight the collagen/gelatin growth rate in investor presentations.

Technological Factors: Efficiency and Innovation

Darling Ingredients Inc. is using technology to both improve operations and create new high-value products. On the operational side, the launch of DarLinQ, a patented sonar and Bluetooth system, allows for real-time monitoring of Used Cooking Oil (UCO) collection, making their supply chain more efficient. This focus on efficiency is working, with gross margins reaching 24.7% in Q3 2025.

In the Food segment, they are innovating with a new peptide designed to naturally stimulate GLP-1 and GIP release-a direct play on the massive weight loss drug trend. Also, continued investment in Diamond Green Diesel (DGD) is crucial for expanding into Sustainable Aviation Fuel (SAF) production, a high-growth, high-margin future market. Technology is driving margin expansion.

Action: Assess the commercialization timeline and market size for the new GLP-1/GIP peptide.

Legal Factors: Compliance and Shareholder Scrutiny

Legal risk is currently elevated. A shareholder investigation was announced in early 2025 concerning stock value decline and potential securities law breaches. This creates a drag on management time and investor confidence, so watch for updates here.

On the regulatory front, there's risk tied to the qualification and sale of Clean Fuel Production Credits (CFPC), which is a new layer of complexity. Also, while minor in the grand scheme, the company still faces ongoing compliance risks, like the $15,000 fine in Maryland for environmental violations at a rendering plant. Global trade laws and tariffs also create supply chain disruption and uncertainty that needs constant legal monitoring.

Action: Monitor the shareholder investigation status and any related management changes.

Environmental Factors: A Competitive Edge

The Environmental factor is a major strength for Darling Ingredients Inc. They achieved their first-ever ISS ESG Prime Status in early 2025, placing them in the top 10% of their industry. This is a competitive advantage for attracting capital and customers.

Their commitment is concrete: a target to reduce Scope 1 and 2 emissions by 42% by 2030, which is aligned with the SBTi (Science Based Targets initiative). The impact is real, too; Diamond Green Diesel's renewable fuel avoided over 10 million tonnes of Greenhouse Gas (GHG) emissions in 2024. This strong focus on water stewardship, aiming to replenish more water than consumed, further solidifies their environmental credentials. ESG is a revenue driver here.

Action: Operations: Draft a 12-month plan to mitigate the risk of minor environmental fines like the one in Maryland by Friday.

Darling Ingredients Inc. (DAR) - PESTLE Analysis: Political factors

The political landscape in 2025 presents Darling Ingredients Inc. with a high-stakes mix of regulatory uncertainty and massive subsidy-driven opportunity, particularly in its Fuel segment. Your exposure to U.S. government policy is defintely the primary political risk, but favorable policy shifts are also driving the long-term growth narrative.

EPA delays on Renewable Volume Obligations (RVOs) create biofuel market uncertainty.

The U.S. Environmental Protection Agency's (EPA) protracted process for finalizing Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS) is the single biggest near-term headwind for the Fuel segment, Diamond Green Diesel (DGD). This regulatory delay clouds the pricing of Renewable Identification Numbers (RINs), which are crucial compliance credits.

The uncertainty has directly impacted profitability. For the first nine months of 2025, Darling Ingredients reported a net income of only $5.9 million, a sharp decline from $177.0 million for the same period in 2024, driven primarily by lower earnings at DGD. In the third quarter of 2025, Darling's share of DGD Adjusted EBITDA dropped to a negative -$2.88 million, a significant swing from a positive +$39.09 million just a year earlier.

Here's the quick math: DGD sold 250 million gallons of renewable fuel in Q3 2025, resulting in a negative -$0.02 EBITDA per gallon to Darling Ingredients' share, net of tax credit factors. That's a tough spot to be in. The EPA's September 2025 proposal to reallocate small refinery exemptions (SREs) for 2023, 2024, and 2025, with options for 100% or 50% reallocation, only adds to the short-term volatility until a final rule is issued.

Reliance on U.S. Inflation Reduction Act (IRA) tax credits for the Fuel segment.

The Fuel segment's financial health is now heavily reliant on monetizing the Clean Fuel Production Credit (PTC) provided by the Inflation Reduction Act (IRA). This is a direct government incentive that provides a vital cash injection to offset margin compression in the renewable diesel market.

To manage liquidity and leverage, Darling Ingredients agreed in Q3 2025 to sell $125 million of its 2025 Production Tax Credits generated by the DGD joint venture, with the proceeds expected in the fourth quarter. The company is actively marketing an additional $125 million to $175 million in PTC credits for sale before the end of 2025.

This reliance is a double-edged sword. While the credits provide a financial lifeline, any future legislative or administrative changes to the IRA's clean fuel tax credit provisions would immediately and severely impact the profitability and valuation of the entire Fuel segment.

• Agreed to sell 2025 PTCs: $125 million.
• Anticipated additional 2025 PTC sales: $125 million - $175 million.
• Total DGD renewable fuel gallons sold (9M 2025): 717.7 million gallons.

Global tariff volatility, particularly from China and APAC, impacts export protein pricing.

While the primary political risk is domestic and tied to the biofuel market, the Feed and Food segments face persistent geopolitical trade friction. Global tariffs continue to present supply chain disruptions. However, Darling Ingredients' vast global footprint, with over 260 facilities across five continents, allows them to arbitrage to the most profitable markets, mitigating the direct impact.

The company has stated that the vast majority of its U.S.-produced ingredients are used domestically, limiting exposure to export tariffs, including those involving China. Still, the risk is real. For instance, in April 2025, China suspended imports of certain Darling Ingredients' poultry meat and bone meal exports, citing a salmonella detection issue. This shows how non-tariff barriers and trade disputes, often linked to broader political tensions, can disrupt specific export revenue streams.

Favorable public policy developments are key to long-term renewable energy growth.

Despite the near-term volatility, the long-term political direction is highly favorable to Darling Ingredients. The current administration's push for energy independence and domestic feedstock preference creates a significant tailwind.

The EPA's proposed policy shift to halve Renewable Identification Number (RIN) credits generated from foreign biofuels is a major win for domestic feedstock suppliers like Darling Ingredients. The company processes approximately 20% of the U.S. animal fat supply and recycles 40% of domestic used cooking oil (UCO), positioning it perfectly to benefit from a policy that penalizes foreign imports. This shift is expected to increase demand for domestic fats, which will support the company's core ingredients business.

Management is confident, adjusting the full-year 2025 core ingredients (excluding DGD) Adjusted EBITDA guidance to a strong range of $875 million to $900 million, partly on the expectation of supportive public policy reinforcing their market position.

Darling Ingredients Inc. (DAR) - PESTLE Analysis: Economic factors

You're looking at Darling Ingredients' economic landscape, and the story for 2025 is a clear split: a resilient core ingredients business offsetting significant volatility in the renewable fuel segment. The core business is defintely the anchor, providing stable, predictable cash flow to fund the more unpredictable, policy-driven fuel operations.

Core ingredients business Adjusted EBITDA is projected at $875-900 million for full-year 2025.

The company's core ingredients business-Feed and Food segments, excluding the Diamond Green Diesel (DGD) joint venture-is demonstrating remarkable economic stability. Management has guided for a full-year 2025 Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in the range of approximately $875 million to $900 million. This projection excludes the volatile DGD fuel segment, giving investors a clear view of the underlying profitability driven by global demand for fats and proteins.

The Feed segment, in particular, showed strength, with its Q3 2025 EBITDA increasing to $174 million, up 31.6% from the prior year's quarter. This performance highlights the economic value of rendering and fat processing, which is less susceptible to the regulatory swings affecting the fuel market.

Q3 2025 total net sales reached $1.6 billion, showing modest top-line growth.

Despite the headwinds in the fuel sector, Darling Ingredients posted total net sales of approximately $1.6 billion (specifically $1,563.97 million) for the third quarter of 2025. This figure represents modest top-line growth compared to the $1.4 billion reported in Q3 2024, driven primarily by the strength of the core segments.

Here's the quick math on the Q3 2025 segment-level performance:

Fuel segment margins are pressured by volatile RINs and LCFS (Low Carbon Fuel Standard) credit prices.

The economic reality for the Fuel segment, particularly its DGD joint venture, remains challenging due to policy uncertainty and commodity volatility. In Q3 2025, the segment faced a difficult combination of factors, which ultimately impacted margins.

• Higher feedstock costs eroded profitability.
• Lower Renewable Identification Numbers (RINs) and Low Carbon Fuel Standard (LCFS) credit prices reduced revenue.
• DGD's contribution to Darling Ingredients' EBITDA was a negative $0.02 per gallon of renewable fuel sold in Q3 2025.

This negative per-gallon contribution, after accounting for discounts and broker fees related to Production Tax Credits (PTCs), starkly contrasts with prior periods, showing how quickly policy and credit price fluctuations can swing the economics of renewable diesel.

Raw material price fluctuations, like stronger fat prices in early 2025, affect margins.

Raw material price swings create both risks and opportunities for Darling Ingredients. In early 2025, the company saw a positive economic effect as stronger fat prices began to flow through its Feed segment, driven by robust demand from the renewable fuels market. This is a double-edged sword: while it boosts the Feed segment's margins (Q1 2025 Feed EBITDA was $110.6 million), it simultaneously increases the feedstock cost for the DGD fuel segment, contributing to the pressure on its margins. The core business is a net beneficiary of the strong demand for domestic fats, but it adds to the cost challenges for the fuel production side.

The company is monetizing $125 million of 2025 Production Tax Credits (PTC).

A key economic action for 2025 is the monetization of federal incentives. Darling Ingredients agreed to sell $125 million of its 2025 Production Tax Credits (PTC), generated by the DGD joint venture under the Inflation Reduction Act (IRA), with proceeds expected in the fourth quarter of 2025.

This is an important liquidity event, and the company is actively marketing additional credits. The total expected PTC generation for 2025 is around $300 million, and the company anticipates selling another $125 million to $175 million by year-end. Monetizing these credits provides a vital cash injection to the balance sheet, helping to offset the lower operating earnings from the DGD segment and allowing the company to continue its focus on debt reduction.

Darling Ingredients Inc. (DAR) - PESTLE Analysis: Social factors

You're looking at Darling Ingredients Inc. (DAR) and its social landscape, and the core takeaway is clear: the company's entire business model-turning waste into value-is perfectly aligned with the most powerful consumer and corporate trends of 2025. This isn't just a feel-good story; it's a fundamental driver of their financial performance, particularly in the Food and Feed segments.

Strong, growing consumer demand for sustainable food and feed ingredients.

Consumer behavior is shifting hard toward products with a clear sustainability story, and this is directly boosting Darling Ingredients' core business. The market is increasingly prioritizing eco-friendly ingredients, which is creating a massive tailwind for the company's upcycled products. This robust demand is evident in the Q3 2025 results for the Feed segment, which saw its Adjusted EBITDA jump to $174.0 million, an impressive 31.6% increase compared to the prior year.

Here's the quick math: strong global demand for feed ingredients and robust domestic fat markets are driving this growth. For the full fiscal year 2025, the core ingredients business is expected to achieve an Adjusted EBITDA of between $875 million and $900 million. That's a huge number that defintely shows the market's appetite for sustainable solutions.

Increasing market focus on collagen and gelatin for health and wellness applications.

The health and wellness boom, particularly in nutraceuticals (supplements), is a major social factor fueling Darling Ingredients' Food segment, anchored by its Rousselot brand. Collagen and gelatin are now staple ingredients in everything from joint health supplements to beauty-from-within products.

The global gelatin market alone is valued at an estimated $3.31 billion in 2025 and is projected to grow at a Compound Annual Growth Rate (CAGR) of 7.4% through 2034. To capitalize on this, Darling Ingredients announced a strategic move in May 2025 to form Nextida, a new company combining its Rousselot business with Tessenderlo Group's PB Leiner. This joint venture is expected to have an initial annual revenue of approximately $1.5 billion and a total gelatin and collagen capacity of about 200,000 metric tons, positioning the company to dominate this fast-growing space.

What this estimate hides is the speed of innovation in collagen peptides, which is where the real premium value is. The Food segment's Q3 2025 net sales were $380.6 million, a 6.5% increase year-over-year, showing this focus is already paying off.

Rising public and corporate pressure for circular economy solutions and waste reduction.

The public and corporate push for a circular economy-where waste is minimized and resources are reused-is essentially Darling Ingredients' business model. They are a pioneer in circularity, transforming organic waste into products for food, feed, and fuel.

This commitment translates into tangible operational metrics that resonate with socially conscious investors and consumers. For instance, the company is a net water producer, meaning it returns more water to the environment than it consumes. In 2024 alone, Darling Ingredients returned approximately 11 billion gallons of water. Also, in February 2025, the company began converting wastewater emissions at its Dublin, Georgia, rendering facility into Renewable Natural Gas (RNG), which both reduces Scope 1 emissions and creates a new revenue stream. It's a win-win for the planet and the balance sheet.

Partnership with the National FFA Organization supports the next generation of sustainable agriculture leaders.

To secure the future of its raw material supply chain and reinforce its commitment to sustainable agriculture, Darling Ingredients maintains a long-standing and active partnership with the National FFA Organization (formerly Future Farmers of America). This is a smart move for talent pipeline and community relations.

The partnership is highly localized and impactful. Through the FFA Blue Jacket Program, more than 65 Darling Ingredients' facility teams connect with local FFA chapters across the country. For the 2025 fiscal year, the company plans to provide more than 400 Blue Jackets to students, removing financial barriers to participation. Overall, the company expects to contribute more than $300,000 to the National FFA Organization this year through scholarships, grants, and program support, building strong ties with future agricultural leaders.

• Contribute over $300,000 to the National FFA Organization in 2025.
• Provide more than 400 Blue Jackets to students across the U.S.
• Engage over 65 company facility teams with local FFA chapters.

Darling Ingredients Inc. (DAR) - PESTLE Analysis: Technological factors

You're looking for a clear picture of how technology is actually changing Darling Ingredients Inc.'s (DAR) business, and honestly, it's all about smarter logistics and high-value product innovation. The company isn't just a collector of waste; it's a sophisticated, vertically integrated processor using proprietary technology to boost margins and enter high-growth markets like Sustainable Aviation Fuel (SAF) and the massive GLP-1 health trend. This technological edge is what's driving their improved operational efficiency.

Launch of DarLinQ, a patented sonar and Bluetooth system, for real-time Used Cooking Oil (UCO) collection monitoring.

The biggest near-term technological win for the Feed and Fuel segments is DarLinQ. This isn't just a fancy sensor; it's a patented sonar and Bluetooth system designed to give real-time, continuous monitoring of Used Cooking Oil (UCO) storage containers. Think of it as a smart tank that tells the truck exactly when it needs to be emptied, not just when it's scheduled.

This technology, rolled out through the DAR PRO Solutions brand, which services over 200,000 restaurant and kitchen facilities across the U.S., tackles two major issues: efficiency and theft. By optimizing collection routes based on real-time data, Darling Ingredients saves on fuel and labor costs. Plus, the system provides real-time theft alerts and prevention features, directly combating the estimated $75 million in UCO that is stolen annually in the United States. That's defintely a material risk reduction.

Innovation in Food segment with a new peptide to naturally stimulate GLP-1 and GIP release.

In the Food segment, the company is using its deep knowledge of protein and collagen to tap into the enormous market for metabolic health and weight management. Their health brand, Rousselot, developed a specific collagen peptide composition called Nextida® GC. This is a non-pharmacological, natural ingredient designed to stimulate the release of two key gut hormones: GLP-1 (glucagon-like peptide-1) and GIP (glucose-dependent insulinotropic polypeptide).

These hormones are what the new blockbuster weight-loss drugs mimic, but Darling Ingredients is offering a natural supplement alternative. A proof-of-concept study showed this peptide increased GLP-1 secretion in a healthy population, positioning the company to capitalize on a major health trend by providing functional food and beverage ingredients.

Continued investment in Diamond Green Diesel (DGD) for Sustainable Aviation Fuel (SAF) production.

The Diamond Green Diesel (DGD) joint venture is a key technological growth engine, shifting its focus toward the high-demand, high-margin Sustainable Aviation Fuel (SAF) market. The final investment decision was made for a SAF project at the Port Arthur, Texas, plant, which is expected to be completed in 2025. This is a critical move to future-proof the fuel business.

The total project cost is estimated at $315 million, with Darling Ingredients' 50% share being approximately $157.5 million. This investment will give the Port Arthur facility the technical capability to upgrade approximately 50% of its current 470 million gallon annual production capacity to SAF. DGD's total renewable fuel sales for the first nine months of 2025 were 717.7 million gallons, showing the scale of the operation this technology is enhancing.

Operational efficiencies are improving gross margins, reaching 24.7% in Q3 2025.

The cumulative effect of these technological and logistical improvements is visible on the income statement. Operational efficiencies, especially in the core ingredients business, are significantly improving gross margins. Here's the quick math on the Q3 2025 results:

The consolidated gross margin jumped to 24.7% in Q3 2025, up from 22.1% in the prior year. This margin expansion, particularly the 27.5% gross margin in the Food segment, shows that the focus on high-value, technology-driven products like the new peptide and improved rendering processes is paying off in a major way. The technology isn't just a cost center; it's a profit driver. Anyway, the next step is to monitor the SAF project completion timeline.

Next Step: Finance: Track the DGD Port Arthur SAF project completion against the Q1 2026 guidance and model the impact of the new SAF production volumes.

Darling Ingredients Inc. (DAR) - PESTLE Analysis: Legal factors

Shareholder investigation announced in early 2025 regarding stock value decline and potential securities law breaches

The legal landscape for Darling Ingredients Inc. shifted in early 2025 with the announcement of a shareholder investigation, a common but serious risk for publicly traded companies. This investigation, announced by Kaskela Law LLC on February 19, 2025, is focused on determining if the company's officers and directors violated securities laws or breached their fiduciary duties to investors.

The core of the issue is the significant decline in the company's stock value. Since July 2023, Darling Ingredients' common stock dropped from a trading price of over $70.00 per share to below $40.00 per share by February 2025, representing a value decline of over 42%. To be fair, this kind of stock drop often triggers these investigations, but it still creates a material legal and reputational overhang.

Here's the quick math on the stock decline that prompted the legal action:

Regulatory risk tied to the qualification and sale of Clean Fuel Production Credits (CFPC)

The company's renewable fuel business, particularly its Diamond Green Diesel joint venture, relies heavily on federal incentives, which introduces regulatory risk. Specifically, the qualification and sale of Clean Fuel Production Credits (CFPC) under the Inflation Reduction Act (IRA) are a source of uncertainty.

In the latter half of 2025, Darling Ingredients announced an agreement to sell $125 million in these production tax credits to a corporate buyer, with proceeds expected to be received later in 2025. This transaction is a critical way to monetize federal incentives. But, the company itself acknowledges the risk of failure to satisfy closing conditions for such sales and the ongoing uncertainty related to the 'administration, guidance and/or regulations associated with biofuel policies,' including the Section 45Z CFPC. Policy changes or delays in regulatory clarity can defintely impact the value and timing of these substantial credits.

Ongoing compliance risks, including a $15,000 fine in Maryland for environmental violations at a rendering plant

Environmental compliance remains a persistent legal challenge, particularly at the company's rendering facilities. This isn't a new issue, but it continues to generate fines and regulatory scrutiny.

The Maryland Department of the Environment (MDE) announced plans in May 2024 to fine Darling Ingredients $15,000 for 51 violations at its Dorchester County Valley Proteins plant. These violations stemmed from a failure to maintain two feet of 'freeboard,' or empty capacity, in wastewater lagoons, which is required to prevent overflows that could pollute waterways. The company formally contested the fine in August 2024. This specific fine is on top of a prior October 2022 consent decree that required the facility's owners to pay a $540,000 civil penalty to the state of Maryland for over 40 violations of a state-issued discharge permit.

The ongoing nature of these violations, even after a significant prior settlement, indicates a systemic compliance risk that could lead to higher future fines, litigation from environmental groups, or operational restrictions. It's a clear area for management to focus on.

• Initial 2022 Consent Decree Penalty: $540,000 civil penalty.
• New 2024 Proposed Fine: $15,000 for 51 freeboard violations.
• Primary Compliance Issue: Failure to maintain two feet of empty capacity (freeboard) in wastewater lagoons.

Global trade laws and tariffs create supply chain disruption and uncertainty

As a global business operating over 260 facilities across five continents, Darling Ingredients Inc. is exposed to shifts in global trade laws, tariffs, and retaliatory duties. However, the company's internal assessment in April 2025 suggested that the current international tariff environment was not expected to materially affect its business operations.

This confidence stems from two key factors. First, the company's scale and integrated supply chain provide flexibility to adapt quickly. Second, the vast majority of the ingredients produced in the U.S. are consumed domestically, which limits the company's exposure to export-related tariffs, including those involving China. Still, while the direct financial impact may be minimal, the general uncertainty in global trade flows complicates long-term strategic planning, especially for its international operations.

Darling Ingredients Inc. (DAR) - PESTLE Analysis: Environmental factors

ESG Leadership and Prime Status

You need to know that Darling Ingredients Inc.'s environmental standing is now a major competitive advantage, not just a compliance issue. The market is defintely taking notice. The biggest signal of this shift came on January 8, 2025, when the company achieved its first-ever ISS ESG Prime Status. This is a big deal because it places Darling Ingredients in the top 10% of companies within its industry for ESG performance, well above the sector average.

This Prime Status reflects a measurable commitment to environmental stewardship (ESG). The company's circular business model-taking food waste and turning it into sustainable products-is the core driver here, but the internal operational targets are what truly cement this rating. We're seeing a clear link between their core business and their sustainability strategy, which is exactly what investors want.

Aggressive Emissions Reduction Targets

The company has set a near-term, science-based target that shows real ambition. They are committed to reducing their Scope 1 and Scope 2 (direct and energy-related) greenhouse gas (GHG) emissions by 42% by 2030. This target aligns with the Science Based Targets initiative (SBTi) and uses a 2023 baseline. This is a critical move to de-risk the business from future carbon taxes or stricter regulations.

In terms of execution, the company is already making progress. For the 2024 fiscal year, they reduced their Scope 1 and 2 emissions by 5% year over year. They also completed a full inventory of Forest, Land Use and Agriculture (FLAG) emissions, which is key for a company in this sector, as it sets the stage for future Scope 3 (value chain) target validation.

Diamond Green Diesel's Decarbonization Impact

The environmental impact of Darling Ingredients' joint venture, Diamond Green Diesel (DGD), is massive and is the single largest positive environmental factor. DGD produces renewable diesel and sustainable aviation fuel (SAF) from waste-based feedstocks like used cooking oil and animal fats. The fuel produced reduces life cycle GHG emissions by up to 80% compared to traditional diesel fuel.

The sheer scale of this operation translates directly into avoided emissions for their customers. In 2024, the renewable fuel produced by DGD avoided more than 10 million tonnes of GHG emissions. To put that into perspective, that single number is almost 5 times the company's entire Scope 1 and 2 operational footprint. DGD's total annual production capacity is approximately 1.2 billion gallons of renewable diesel, with the Port Arthur plant having the capability to upgrade up to 50% of its capacity to neat SAF. That's a huge lever for global decarbonization.

Water Stewardship and Efficiency

The focus on water stewardship is strong, especially for a manufacturing business. Darling Ingredients' long-term commitment is to replenish more water than they consume, which is an ambitious goal for any industrial player. Their initial short-term target was to reduce the water intensities of their operations by 5% by 2025 from a 2020 baseline.

Here's the quick math: they hit that target early. The company actually decreased its global water intensity by 20% in 2022, effectively achieving the 2025 goal three years ahead of schedule. This suggests a high level of operational efficiency and capital expenditure on water-saving technologies. Now, the new focus is on maintaining that efficiency and moving toward the net-positive water goal. They are doing this by:

• Implementing high-pressure and low-flow wash systems.
• Using steam condensate recovery and return systems.
• Developing water conservation plans for operations in higher water-risk areas.

The early achievement on water intensity is a powerful indicator of management's ability to execute on environmental commitments.