Darling Ingredients Inc. (DAR) stock surged 5.13% in pre-market trading on Friday, February 7th, 2025, following the company's Q4 2024 earnings call that highlighted tailwinds from the new 45Z renewable fuel tax credit and improving regulatory landscape.

During the call, Darling's management team discussed the positive implications of the 45Z tax credit, which provides a carbon intensity (CI) score-adjusted tax credit specifically for US biofuel producers. As the largest producer of low-CI feedstocks like animal fats and used cooking oil, Darling is well-positioned to benefit from this credit.

Furthermore, the company's joint venture Diamond Green Diesel (DGD) stands to gain from its ability to process these advantaged low-CI feedstocks more efficiently than competitors. With foreign biofuel imports now ineligible for the credit, the playing field has shifted in favor of domestic producers like Darling and DGD.

Darling's CEO Randy Stuewe outlined plans to ramp up production of Sustainable Aviation Fuel (SAF) in 2025, capitalizing on the successful start-up of the world's largest SAF plant in 2024. The company sees robust demand for SAF and aims to convert more volumes from renewable diesel to the higher-value SAF product.

Overall, the regulatory clarity around the 45Z credit, coupled with Darling's strategic positioning as a low-carbon feedstock leader, is expected to drive stronger results in 2025. Management provided guidance of combined adjusted EBITDA between $1.25 billion to $1.3 billion for the year, reflecting confidence in the company's growth trajectory.