Derivative Instruments

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

The Company enters into New York Mercantile Exchange NY Harbor ULSD ("NY Harbor ULSD" or previously referred to as heating oil), CBOT Soybean Oil (previously referred to as soybean oil) and New York Mercantile Exchange Natural Gas futures, swaps and options ("commodity contract derivatives") to reduce the risk of price volatility related to anticipated purchases of feedstock raw materials and to protect cash margins from potentially adverse effects of price volatility on biomass-based diesel sales where prices are set at a future date. All of the Company’s commodity contract derivatives are not hedge accounting designated derivatives and recorded at fair value on the Consolidated Balance Sheets. Unrealized gains and losses are recognized as a component of biomass-based diesel costs of goods sold reflected in current results of operations. At December 31, 2019, the net notional volumes of NY Harbor ULSD, CBOT Soybean Oil and NYMEX Natural Gas covered under the open commodity derivative contracts were approximately 54.6 million gallons and 120.4 million pounds and 2.1 million million British thermal units, respectively.

The Company offsets the fair value amounts recognized for its commodity contract derivatives with cash collateral with the same counterparty under a master netting agreement. The net position is presented within Prepaid and other assets in the Consolidated Balance Sheets, see "Note 9 – Other Assets". As of December 31, 2019, the Company posted $9,256 of collateral associated with its commodity-based derivatives with a net liability position of $3,116.

The following table sets forth the fair value of the Company's commodity contract derivatives and amounts that offset within the Consolidated Balance Sheets:

	December 31, 2019						December 31, 2018
	Assets			Liabilities			Assets			Liabilities
Gross amounts of commodity derivative contracts recognized at fair value	$	1,633		$	4,749		$	11,843		$	1,799
Cash collateral	9,256			—			3,755			—
Total gross amount recognized	10,889			4,749			15,598			1,799
Gross amounts offset	(4,749		)	(4,749		)	(1,799		)	(1,799		)
Net amount reported in the Consolidated Balance Sheets	$	6,140		$	—		$	13,799		$	—

The following table sets forth the commodity contract derivatives gains and (losses) included in the Consolidated Statements of Operations:

	Location of Gain (Loss) Recognized in income	2019			2018		2017
Commodity derivatives	Cost of goods sold – Biomass-based diesel	$	(28,898	)	$	18,399	$	(23,437	)