(Reuters) -Chevron Corp said on Monday it would buy biodiesel maker Renewable Energy Group Inc in an all-cash deal valued at $3.15 billion as the oil major looks to boost its clean-energy business.

Chevron will pay $61.5 for each share of Renewable Energy, representing a premium of over 40% to the company’s last closing price.

Major oil firms are facing increasing governmental and investor pressure to join the fight against climate change, given their large contributions to global emissions.

Chevron has set a target to cut operational emissions to net zero by 2050 and in September pledged to invest $10 billion to reduce its carbon emissions footprint through 2028, with about $3 billion earmarked for renewable fuels.

Ames, Iowa-based Renewable Energy is a producer and supplier of cleaner fuels like biodiesel and renewable diesel.

The deal is expected to accelerate progress toward Chevron’s goal to grow renewable fuels production capacity to 100,000 barrels per day by 2030 and brings additional feedstock supplies and pre-treatment facilities, the company said in a statement.

(Reporting by Rithika Krishna in Bengaluru; Editing by Aditya Soni)