Do Biofuel Stocks ADM and BG Belong in Your Portfolio?
StockNews
Published May 10, 2021 09:43AM ET
Updated May 10, 2021 10:31AM ET
Do Biofuel Stocks ADM and BG Belong in Your Portfolio?
With a new administration, comes a new energy policy. Agricultural companies such as Archer Daniels Midland (NYSE:ADM) and Bunge Limited (NYSE:BG) are in the supply chain of biofuel, which help powers automobiles. As climate change initiatives increase, will these companies benefit? Read more to find out.
- The primary ingredient in ethanol in the US is corn- In Brazil, it is sugarcane
- The US ethanol blend was a farming subsidy cloaked in an environmental initiative
- Brazilian cars run on ethanol
- ADM is at the center of the US ethanol and agricultural markets
- Bunge has huge Brazilian exposure in the sugar business
On his first day in office on January 20, 2021, President Biden canceled the Keystone XL pipeline project that moved crude oil from the oil sands in Alberta, Canada, to Steele City, Nebraska, and beyond to the NYMEX delivery point in Cushing, Oklahoma. The symbolic move ushered in a new era that ended the “drill-baby-drill” and “frack-baby-frack” policies under the Trump administration.
President Biden pledged to address climate change through a dramatic shift in US energy policy on the campaign trail. He has been following through on that promise. The US will increase regulations on the fossil fuel industry and support alternative and cleaner sources from the sun, wind, hydro, and biofuel sectors.
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