ICIS' Global Biodiesel price report contains news and analysis of market movements around the world. Our price assessments focus on European spot, South America, North America domestic and Asia spot.
The commentary highlights the influencing factors driving prices, and includes feedstock prices and graphs to reflect changing prices in this weekly report. Whether you are directly buying or selling on the biodiesel or related markets, this informative report will help you to make confident business decisions.
Our editor gives their expert view
Biodiesel Overview Transcript
In the US biodiesel is an emerging market. It was reduced to about 10% of its production capacity, as the Federal tax credit disappeared and has now reappeared.
With the reappearance of that, biodiesel is beginning to find its footing in the US market.
The material is highly dependent on the crude oil markets, it’s traded at a premium to heating oil, the spread on heating oil sets the prices for biodiesel that is, being looked at for basis on trading on spot market. There are no contracts in the US biodiesel markets at this time.
The market is also dependent on the crude-glycerine co-product and that material is also watched very closely for its availability for sales.
Most of the biodiesel in the US right now is traded at a premium, a spread to heating oil. The heating oil market, that has been the most successful area for domestic biodiesel sales as a blendstock it’s still finding its feet. It’s coming back into viability on the back of a reinstatement of the Federal tax credit $1/gal blender credit.
It’ll offer the players in the market more opportunity to find domestic sales for the product.
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Biodiesel: Market overview
Updated to Q3 2016
The European biodiesel market is unlikely to see any real change in fundamentals during the third quarter. Market participants had expected buying interest to increase with the onset of the summer season but this has not occurred and no increase is expected imminently.
The US biodiesel industry looks positive in the third quarter amid improving margins, higher mandated blend volumes and approval of the $1/gal federal tax credit. The industry is again moving into a new quarter on political precepts rather than a supply/demand-driven market. The tax package includes a two-year retroactive extension of the $1/gal biodiesel and renewable diesel blenders tax credit.
In Southeast Asia, biofuel usage policies will support demand for palm methyl ester (PME). Indonesia introduced B20 in early 2016, requiring motorists to use fuel with 20% biodiesel blend, and other regional states, such as Malaysia and Thailand, have plans to raise usage to B10 within the year. PME exports to countries with no biofuel usage mandates will, however, remain thin if gasoil blenders there continue to shy away from PME given its wide spread over gasoil values.
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Biodiesel news & analysis
ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
Our in-depth market knowledge drives our specialist focus, as we recognise the importance of individual market dynamics and not a one-size-fits-all approach.
Over 25 years of reporting on key chemicals markets, including Biodiesel, has brought global recognition of our methodology as being unbiased, authoritative and rigorous in preserving our editorial integrity. Our global network of reporters in Houston, London, Singapore, Shanghai, Guangzhou, Mumbai, Perth and Moscow ensures unrivalled coverage of established and emerging markets.
Biodiesel is a clean burning alternative fuel, produced from renewable resources. The most commonly used feedstocks are rapeseed, soy and palm oil. Corn and tallow are also used. Rapeseed methyl ester (RME) is mainly produced in Europe; soy methyl ester (SME) comes mainly from the Americas; and palm methyl ester (PME) from Asia, in particular Malaysia and Indonesia.
Biodiesel is made through a chemical process called transesterification to make the methyl ester with glycerine and is produced as a by-product.
Biodiesel can be used in compression-ignition (diesel) engines and most oil-fired boilers. It is suitable for most applications where regular diesel is currently used. It can also be used in most modern diesel engines without modification, including those in passenger cars, sport utility vehicles, light trucks, buses, ships, trains, off-road heavy equipment and mining equipment, as well as for home heating fuel, power generation and in two-stroke engines (as a mixing agent).