European biodiesel prices have increased across the board, with FAME-10 and HVO showing particularly strong gains as low sulfur gas oil (LSGO) prices surged following strikes on Russian oil infrastructure.
FOB Amsterdam-Rotterdam-Antwerp (ARA) prices reached $1,546/mt for UCOME (up $36/mt from two weeks prior), $1,342/mt for FAME0 (up $7/mt), $1,488/mt for FAME-10 (up $63/mt), and $2,628/mt for HVO derived from used cooking oil (up $98/mt).
The price increases were primarily driven by LSGO, which jumped to $778/mt from $724/mt two weeks earlier. Ukraine’s strikes on Russian oil infrastructure and sanctions on Lukoil and Rosneft, the two largest Russian suppliers, contributed to the gasoil price movement.
Blending economics improve
Biodiesel prices rose more slowly than LSGO, making blending operations more economically attractive for fuel distributors.
However, physical trading activity toward year-end remains subdued. According to one market participant, the tender season and anticipation of regulatory changes for 2026 continue to weigh on market activity.
German policy developments in focus
Market participants are following potential changes to Germany’s biofuel regulations. Reports indicate Germany has again postponed voting on cancelling double counting provisions.
In proposed amendments to the Renewable Energy Directive III (RED III), Germany is expected to increase the quota for advanced biofuels. Under the anticipated changes, renewable fuels would only be eligible for credit if on-site inspections by state inspectors are possible. Additionally, crediting biofuels made from residual materials from palm oil production (POME) toward the greenhouse gas quota would be discontinued.
These regulatory shifts could increase demand for biofuels and non-POME feedstocks including used cooking oil, vegetable oils, and animal fats, while potentially tightening supply through stricter due-diligence requirements.
Used cooking oil market dynamics
UCO 5% free fatty acid (FFA) CIF ARA decreased to $1,135/mt from $1,150/mt two weeks ago, while FOB China UCO 5% FFA remained at $1,100/mt.
Adequate EU supply levels and maintenance at several sustainable aviation fuel (SAF) plants in China during Q4 continue to pressure UCO prices.
Wide bid-ask spreads have emerged in the UCO market. One market participant reported receiving FOB ARA offers up to $1,250/mt, against buying interest at $1,150-1,160/mt for spot loadings. A Chinese player noted that “bids from the EU are below costs.”
European Commission data shows UCO imports into the EU reached 115,947 mt in October, compared with 108,156 mt in September and 128,000 mt in October last year. During January-October this year, the EU imported 1.550 million mt of UCO, compared with 1.427 million mt in the same period last year.
Asian supply outlook shifts
Looking ahead to next year, UCO prices may find support from rising demand due to EU biodiesel policies and potentially tighter supply conditions.
Malaysia’s used cooking oil export volumes will face “immediate and moderate pressure” next year as a sustainable aviation fuel plant in Johor ramps up production, according to Malaysia’s deputy plantation and commodities minister Chan Foong Hin. Domestic players will actively secure feedstock to meet the EcoCeres plant’s 350,000-ton capacity, forcing them to offer competitive pricing to divert UCO away from export routes.
Malaysia supplied over 1 million mt of UCO to global markets in 2024, making it one of the world’s major UCO exporters.
Italian energy company Eni has broken ground on the Pengerang Biorefinery, a joint venture between PETRONAS, Enilive and Euglena, in Pengerang, Johor, Malaysia. The facility will process up to 650,000 tonnes of renewable feedstock annually and is expected to produce SAF, hydrogenated vegetable oil, and bio-naphtha. Operations are scheduled to begin in the second half of 2028.
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