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.
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 2014
European rapeseed methyl ester (RME) production is expected to remain healthy going forward, with supply of palm methyl ester (PME) and soybean methyl ester (SME) remaining limited as a result of European anti-dumping duties being introduced to biodiesel from Indonesia and Argentina.
RME premiums should remain supported by firmer rapeseed prices as supply of the old crop dwindles ahead of the new crop hitting the market.
In Latin America, biodiesel production is expected to be at high rates. The Argentine Senate approved a complete tax exemption for domestic biodiesel production. The exemption expires on 31 December 2015, but can be extended up to 2024. Additionally, the Minister of the Economy on 9 May reduced the export taxes by about half. The export tax was reduced from 21.75%, the rate since August 2012, to 11.06%.
In Brazil, the country announced last week that it will increase the amount of biodiesel that must be blended into diesel to 6% in July and to 7% in November, up from the current 5%. Changing the blend rate has been discussed for years but faced resistance from parts of the government amid fear of rising inflation.
Meanwhile in the US, the fate of the Renewable Volume Obligations (RVO) and reinstatement of the biodiesel tax incentive is the main focus for players in the US market. The American sector is eager to reinstate the $1/gallon biodiesel tax incentive that expired on 31 December 2013. The future of that incentive is considered critical by most biodiesel producers.
In Asia, the improved spread between palm oil and gas oil encouraged deals and discussions among market players. The increased momentum was also supported by renewed buying interest from China, where buyers tried to replenish their inventories after the previous round of purchasing at the beginning of 2014. Toward the end of June, spot prices on FOB SE Asia basis were at $860-890/tonne. The availability of prompt July shipment was heard to be limited while forward shipments were largely available at $880-890/tonne FOB SE Asia.
News & analysis
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).