Biodiesel Prices, markets & analysis
ICIS provides independent and unbiased pricing information, news and market analysis for the global biodiesel market. Our network of price reporters based in Asia, Europe and the US deliver local insight for each of these markets, which is published in our global weekly report.
If you buy or sell biodiesel or related products, our report, news and market intelligence will give you the prices and analysis of the factors driving the markets. This will give you confidence in making commercial decisions.
Global biodiesel prices are also available via FTP.
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
The European Commission’s introduction of antidumping duties (ADDs) to biodiesel imports from Argentina and Indonesia has meant less volumes are entering Europe.
There is little soybean methyl ester (SME) or palm methyl ester (PME) entering Europe meaning blending components for fatty acid methyl ester (FAME) 0 are limited, resulting in tight FAME 0 supply. This eventuality has led to increased amounts of rapeseed methyl ester (RME) being used as an SME substitute in FAME 0 blends. However, with uncertainty surrounding the European market in terms of legislative changes and future trade flows, buying interest remained unexceptional.
In Latin America, Argentina’s tax hike on biodiesel exports and lowering of domestic prices, in a move to make domestic fuel prices more affordable, has undermined the viability of the biodiesel industry and many large producers have been running their plants at 40% of capacity. Biodiesel exports from Argentina to Europe have dwindled, following an antidumping complaint filed with the EU.
In the US, biodiesel production has ramped up following the reinstatement of the $1/gal federal tax incentive. The US Environmental Protection Agency (EPA) in its Final Rulemaking left the proposed 2.75bn gallons of advanced biofuel unchanged for 2013 and the overall renewable fuel requirement of 16.55bn gallons was also unchanged. This was good news for the biodiesel sector because biodiesel and renewable diesel have the ability to satisfy the advanced biofuel portion of the rulemaking as well as the Renewable Fuels Standard (RFS) mandate of 1.28bn gallons for 2013. Production is expected to increase steadily over the course of the year to meet the RFS mandated production numbers.
Asian PME trade was still expected to be limited, because of the unsuitability of PME to be used in winter due to its high cold filter plugging point. A producer said some discussions might resume late this year, when traders start to consider shipments for spring in Europe.
Updated to mid-August 2013
News & analysis
Biodiesel news & analysis
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).