Marine biodiesel prices are rising in northwest Europe, boosted by the halving of the Dutch advanced tickets (HBE-Gs) multiplier for maritime blending.
B30 advanced biodiesel dob ARA range blend prices hit a four-month high of $741.94/t on 2 January, up by $81.97/t compared with the previous trading day on 29 December. It marked the largest rise over a single trading session since 7 March 2022, although prices edged down to $737.03/t the following day.
B30 is a blend comprising 30pc advanced fatty acid methyl ester (Fame) 0°C CFPP biodiesel and 70pc very low-sulphur fuel oil (VLSFO). The calculated dob ARA range price incorporates a deduction for HBE-Gs. These are a class of Dutch renewable fuels units, or HBEs, used by companies that bring liquid or gaseous fossil fuels into general circulation and are obligated to pay excise duty/energy tax on fuels.
The Dutch government has reduced the multiplier for biofuels in maritime shipping to 0.4 from 0.8 this year. Biofuels that are produced from feedstocks listed under Annex IX A of the EU's recast Renewable Energy Directive (RED II) and are blended into marine fuels can be double counted in the Netherlands. They now return 0.8 times the energetic value of the blended biofuel, compared with 1.6 times previously.
Market participants reported firmer demand for B30 advanced biodiesel towards the end of 2023 in anticipation of the multiplier's reduction this year, although trading activity has since waned as a result of the new year holidays.
Another factor supporting marine biodiesel prices in Europe is the potential impact of shipping disruption in the Red Sea on biofuel imports from Asia. Yemen's Houthi rebels escalated their attacks on vessels in and around the Red Sea in the last couple of weeks of 2023. The B30 advanced Fame 0 dob ARA range averaged $675.94/t on 18-29 December, compared with $656.71/t in the previous two weeks.
B30 blends comprised of used cooking oil methyl ester (Ucome) and VLSFO were priced just $16.11/t above the B30 advanced Fame 0 dob ARA range on a fob basis on 2 January, the narrowest premium in Argus records. B24 Ucome and VLSFO dob Algeciras-Gibraltar blend prices were at a $36.06/t premium on 2 January, also the narrowest on record.
