Biofuels and feedstocks
Overview
Demand for biofuels is increasing significantly, driven by the need to decarbonise road transport as part of the energy transition. Global biofuels output is expected to rise by more than 3mn b/d in the next five years, and such rapid growth means that new challenges and opportunities are constantly emerging. Keeping on top of the ever-changing biofuels landscape requires accurate pricing, insightful analysis and access to the latest data.
The Argus biofuels solution provides in-depth pricing and market analysis across the entire global renewable fuel supply chain, from original feedstock to finished fuel, with prices and key insights into regional biodiesel, ethanol and feedstock markets.
Latest biofuels news
Browse the latest market moving news on the global biofuels industry.
EU to consider E20 gasoline blend
EU to consider E20 gasoline blend
London, 24 April (Argus) — European Commission president Ursula von der Leyen said the commission will consider authorising a higher 20pc ethanol blend in gasoline (E20) in the revision of the policy framework for fuels, in a letter to three MEPs this week. Von der Leyen wrote in response to a letter from the three German MEPs — Norbert Lins, Peter Liese and Jens Gieseke — sent in June last year, in which they proposed the accelerated standardisation and market launch of E20 fuel. They said that this higher blend could "make a significant contribution to achieving our climate goals without placing an undue burden on citizens." In her response von der Leyen said that the "the commission confirms the role that higher biofuel blends can play in the decarbonisation of existing fleets". But she also said that the commission would take into account "possible problems related to the suitability of engines of existing vehicles for this fuel, as well as the need to incentivise investment in advanced biofuels". Currently the maximum ethanol blend permitted in the EU is 10pc (E10). Authorising E20 would double the amount of ethanol that could be blended into gasoline, but no timeframe on such a decision was provided. The EU-27 imported more than 1mn t of undenatured ethanol in 2025 , according to Eurostat data. EU energy commissioner Dan Jorgensen said last month that increasing the uptake of biofuels could substitute fossil fuels and alleviate pressure on markets, when discussing the "potentially prolonged disruption" of oil products supplies caused by the US-Israel war on Iran and resulting closure of the strait of Hormuz. This point was not mentioned by von der Leyen in her letter. The US will allow refiners and retailers to supply E15 gasoline — a higher than usual blend — in some states from May, and will waive other fuel rules as part of attempts to temper pump prices that have surged because of the war. Argentina has done the same , while some Asia-Pacific countries are considering increasing blending levels. In Europe, indirect effects of the war caused ethanol prices to rise . Average 75pc greenhouse gas emissions-saving crop-based ethanol hit its highest since September 2022 on 13 April. Romania has decided to remove the requirement to blend 8pc biofuels into gasoline because it pushes prices for the fuel up. Prior to the Iran war, the European ethanol market was already structurally short coming into the year. And member states' mandated targets continue to increase under the EU's latest Renewable Energy Directive (RED III). But provisional application of the EU-Mercosur interim Trade Agreement is set to begin on 1 May , a deal that will allow reduced import tariffs on a total of 200,000 t/yr to be phased in incrementally across six years. Rising bio-mandates for road fuels are likely to add further pressure to the already waning demand for European gasoline. Europe's primary export outlets — the US Atlantic coast and west Africa — have reduced their reliance on European gasoline, becoming increasingly self-sufficient. Since Europe is structurally long on gasoline — producing more than it consumes — falling export demand has led to higher stock levels compared with historic averages in recent years. Participants have pointed to plentiful stocks across Europe this year, with some traders suggesting waning demand may lead to an oversupplied European market. Refiners have begun slowing gasoline blending activity to curtail production, in part due to the backwardation caused by the US-Iran war, which tightened prompt global energy supplies, but also because of limited outlets. By Toby Shay and Atishya Nayak Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Shipping needs pragmatic decarbonisation approach: IMO
Shipping needs pragmatic decarbonisation approach: IMO
Singapore, 24 April (Argus) — The maritime sector's push towards net-zero emissions suffered a "small setback" at the International Maritime Organisation (IMO) Marine Environment Protection Committee (MEPC) meeting last October, but the industry needs a "pragmatic" approach given the current geopolitical climate, IMO secretary general Arsenio Dominguez said at the Singapore Maritime Week (SMW) conference this week. The focus on decarbonisation "is not diminished", said Dominguez, adding that research and investment into decarbonising the sector is still ongoing. Freedom of navigation and the safety of crew remains top of mind for the maritime industry, and the IMO has proposed an evacuation framework for affected vessels in the Mideast Gulf. The sector is keeping close watch on the 84th Marine Environment Protection Committee (MEPC) that will be held in London next week, and key shipping groups have expressed support for the IMO's greenhouse gas (GHG) reduction ambitions ahead of the session. The US-Iran war foregrounds the energy trilemma between energy security, affordability, and sustainability, said SMW panellists, noting the maritime sector needs to balance all three components for a resilient transition to greener fuels, particularly as the shipping sector is "pulled in many directions" given short-term supply shocks and regional regulations. Recent supply shocks have shown countries need to diversify their economy and source for alternative fuel options, said Dominguez. But panellists emphasised that cost barriers have slowed the shift to greener fuels, since affordability requires scale and investment. One of the things that would drive the scale-up and investment in greener fuels is the certainty of regulations, said Stefan Nysjo, head of power supply at Finnish engine manufacturer Wartsila Marine Power. Supportive policies are "important when you're entering a market where there is no market", said ExxonMobil Asia Pacific chairman and managing director Geraldine Chin. A carbon accounting system underpinned by transparency is the way forward, said Chin, stressing that carbon intensity systems must be implemented on a total life cycle basis, and gradually such that it doesn't shock the market. Decarbonisation solutions "must be economic" and the market must depend on new technologies that would support the uptake of alternative fuels like ammonia, hydrogen, and methanol, she said. But several panellists noted that businesses are not waiting for regulations to be fixed before deciding what to do in terms of decarbonisation. We have to look at "what are the options today… and not in 20 years", said Mediterranean Shipping Company (MSC) head of maritime policy and government affairs Marie-Caroline Laurent. MSC had chosen the LNG pathway with the hope of progressing to bio-methane and e-methane in the future, although they are not closed to other fuel options. "The choice was a very practical one," said Laurent. Maersk has committed to low-carbon fuel options, with methanol being one of them, said its management and technology Leonardo Sonzio. The Danish container liner has net-zero greenhouse gas emissions target by 2040, with intermediate targets by 2030. Smaller shipping firms may not have the luxury of choosing several fuel pathways, said shipping firm CMB.Tech's chief executive Alexander Saverys. Decarbonisation can only pick up when the cost of alternative fuels becomes "cheap compared to diesel", said Saverys, adding that CMB.Tech had chosen the ammonia pathway given its usage in other industrial sectors. Economist Martin Stopford said a lot of the "low hanging fruits" have been picked in the past 50 years, driven by demand for energy from crude, and the "move to a new era" of cleaner fuels would require higher costs, deeper knowledge and further efforts in development. By Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Brazil eyes UCO imports to unlock SAF output
Brazil eyes UCO imports to unlock SAF output
Sao Paulo, 23 April (Argus) — Brazilian refineries are looking to import used cooking oil (UCO) to produce sustainable aviation fuel (SAF) as they struggle with limitations in domestic collection and traceability and thanks to the feedstock's higher economic attractiveness. This residual feedstock is likely to gain greater relevance in SAF projects, given expectations of higher margins from this biofuel compared with biodiesel. Around 1pc of biodiesel produced in Brazil in 2025 used domestic UCO as a feedstock, data from hydrocarbons regulator ANP show. Brazil currently prohibits UCO imports, but the government is considering creating a quota — still undefined — to allow such imports exclusively for SAF production, Euler Lage, a project manager focused on renewables for the presidential chief of staff, said recently . If authorized, market participants expect UCO imports to come mainly from Asia, the world's leading producer. Support from the Asian market is likely to be temporary, until other feedstocks with higher or similar added value become available to Brazilian producers. Brazil's UCO market remains unregulated and lacks official data. Rendering association Abra began representing the UCO sector in January, initiating efforts to structure the market. Abra's initiative ranges from creating product specifications to improving UCO's traceability. Establishing a feedstock's origin is a key requirement for a product to generate Cbio decarbonization credits under Brazil's Renovabio biofuel policy. The requirement is applicable for credits generated from the use of SAF and other biofuels, such as biodiesel and ethanol. Abra is working on developing a specific national classification of economic activities codes for UCO. The code is essential for granting official recognition to the activity, allowing companies in the sector to be correctly classified, included in government statistics, and protected by greater legal certainty, Abra president Decio Coutinho told Argus . The association is also developing an app to record information on UCO collection and movement, aiming to reduce traceability gaps and increase transparency throughout the supply chain. Abra estimates that Brazil can collect around 2mn metric tonnes (t)/yr of UCO, around 40pc of its edible oil consumption. More conservative projections estimate collection if 500,000-1mn t/yr, according to market participants. Alternative feedstocks Other feedstocks such as soybean oil, technical corn oil and beef tallow are also on the radars of Brazilian companies interested in producing SAF via the hydrotreated esters and fatty acids (HEFA) route. The 17,000 b/d Riograndense refinery, in the southern state of Rio Grande do Sul, plans to invest in oilseeds canola and carinata , seizing the region's potential for winter crops production. The project's strategic location will allow it to not depend on UCO availability and collection, according to the refinery. A second production phase of the privately operated 300,000 b/d Mataripe refinery, in northeastern Bahia state, envisages an SAF production project that uses oil from macauba — the Brazilian yellow coconut — as its primary feedstock. Participants expect the refinery to shift all biofuel production to this alternative feedstock as of 2035, replacing UCO and soybean oil. Both projects aim to initially serve international markets, such as Europe and the US, because of their maturity and demand levels. Pricing for Brazilian SAF should use the foreign market as a reference until the Brazilian market gains traction. Brazil currently produces 10,500 b/d of SAF, all in state-controlled Petrobras' Reduc refinery. The country will produce 101,600 b/d by the end of this year. The national aviation fuel program ProBioQAV establishes a mandate for airlines to gradually reduce greenhouse gas emissions in their domestic operations as of 2027 through the use of SAF. Under the rule, the mandatory GHG reduction starts at 1pc in 2027 and increases progressively until reaching 10pc in 2037. By Natalia Dalle Cort and Maria Albuquerque Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
European HVO Class IV-II spread at an all-time high
European HVO Class IV-II spread at an all-time high
London, 22 April (Argus) — The northwest European HVO Class IV–II spread reached a record high of around $450/t on Tuesday, 21 April, up from $250/t a month prior, driven by scarce Class IV offers and growing expectations of compliance-driven demand. Hydrotreated vegetable oil (HVO) Class II is produced from used cooking oil (UCO), while Class IV is made from palm oil mill effluent (Pome). Under the EU Renewable Energy Directive (RED), the contribution of Class II — along with other biofuels made from Annex IX B feedstocks — is capped in meeting the transport renewable energy target, whereas Class IV is incentivised alongside biofuels made from Annex IX A feedstocks. Biofuels made from Annex IX feedstocks are double-counted toward mandate compliance in many member states. In practical terms, the spread widened because the Class IV premium to gasoil traded higher by $95/m³ on Tuesday's Argus Open Markets (AOM), while Class II only traded higher by $20/m³. Class IV firmed because of supply-side behaviour linked to regulatory expectations, with market participants attributing the move mainly to a scarcity of Class IV offers in the Amsterdam-Rotterdam-Antwerp (ARA) hub. Expectations that the Netherlands and Germany will abolish double-counting of Annex IX feedstocks from 2026 are likely to significantly boost HVO demand this year. As higher absolute amounts of biofuel would be required to meet greenhouse gas (GHG) reduction quotas, demand for drop-in fuels such as HVO is likely to rise. Those expectations strengthened following legislative developments in Germany and the Netherlands on Tuesday. The countries are among Europe's largest biofuels consumers. In Germany, implementation of the updated Renewable Energy Directive (RED III) has been added to the parliamentary agenda on Thursday , while in the Netherlands legislation amending the Environmental Management Act and the Excise Duty Act has been ratified . Both countries — along with France, Italy and Spain — missed the 21 May 2025 RED III implementation deadline . This had raised questions about whether higher RED III targets and the removal of double-counting would apply retroactively from 1 January 2026. Most market participants now expect the changes to proceed. In parallel, use of Pome in Germany had been under question, but it is now likely to be allowed for quota generation this year, with a ban anticipated from 2027. With UCO-based HVO capped, traders said demand could increasingly shift toward advanced grades such as Class IV, leaving scope for further widening in the Class IV–II spread. Beyond physical fundamentals, market structure may also be contributing to the spread widening. The Class IV increase follows last week's first trade in the Class IV paper contract. Historically, Class IV exposure has often been hedged using the Class II contract, according to participants, but traders said the newly-launched Class IV paper instrument could allow Class IV values to decouple more clearly from the Class II benchmark, supporting a wider spread. The third quarter Class IV/Class II spread traded at +$350/t ($2,060/t, $1,710/t) on 17 April, with post trade interest described as wide. Ice launched the Argus -settled contract on 7 April. Participants can trade the contract as an outright and as a differential to front-month gasoil. Additional support for Class IV could be coming from Indonesia, where the government said on Tuesday that fuel blenders will be required to submit plans for implementing a 50pc biodiesel–fossil diesel (B50) blending mandate from 1 July. Indonesia exports refined Pome oil to Europe and Asia-Pacific, although crude Pome exports have been restricted since January 2025 . The Argus Pome oil cif ARA price rose after the news, as Indonesia may re-direct more of its Pome supply toward its biodiesel production. By Evelina Lungu HVO Class IV-II spread $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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