Used cooking oil led a broad move higher across the biodiesel complex since Vesper’s mid-July report. UCO CIF ARA firmed 18.7%, well ahead of the rest of the pack, while UCO ex-works Netherlands added 3.0%.
The wider complex followed the energy market up. Low sulfur gasoil firmed 9.6% to $1,243/mt on 25 August. FOB ARA biofuel grades moved with it: FAME 0 up 10.7%, UCOME up 9.8% and FAME -10 up 13.9%. On the HVO side, tallow-based material gained 14.6%, UCO-based 9.5%, and vegetable oil-based 3.7%.
Shipping through the Strait of Hormuz has meanwhile stopped almost entirely. Outbound transits fell to zero on 24 August with only four inbound vessels, leaving total traffic at about 3% of pre-war levels. The 18 June US-Iran memorandum of understanding expired on 18 August without a deal. Oman is now mediating: Foreign Minister Badr Albusaidi arrived in Tehran on 24 August, and a joint Iran-Oman statement the following day proposed a temporary joint maritime corridor and a joint mine-clearance project, with technical talks continuing on permanent traffic management.
UCO trade flows have split by region. China’s exports in January to July reached 2,231,305 mt, up 54.8% year on year, with July alone running at more than double last July’s pace. EU imports over the same period slipped 2.4%. US imports in the first half fell 40.3%, still reflecting tariffs on Chinese UCO, though the gap has narrowed from 58.2% down over January to April.
German demand is the other clear pull. HVO consumption in the first five months of 2026 reached 270,700 t against 64,900 t a year earlier, per UFOP, on a GHG reduction quota rising from 10.6% to 12%, the removal of double-counting for waste-based biofuels from 1 January, and new rules blocking carry-over of surplus quota. BAFA data show combined biodiesel and HVO blending passed 10% for the first time in April. Germany also submitted a draft law to the European Commission on 10 August that would allow retroactive revocation of biofuel sustainability certificates in fraud cases, with a possible October effective date.
US policy pulled the other way. RIN credit prices dropped on 24 August after the EPA extended the 1 September compliance deadline and signaled it would rule on 34 pending small refinery exemption petitions by the end of the month. Conventional ethanol D6 RINs traded at $1.75, down 34 cents and the lowest since 15 April, while D4 biomass-based diesel RINs fell to about $1.92. European mandates and US compliance value are now pulling feedstock demand in different directions heading into Q4.
