Derailment may interrupt SoCal renewable diesel

Market: Biofuels
01/05/24

A Union Pacific train derailment in Colton, California, this week could curtail rail-delivered renewable diesel (RD) availability near Los Angeles.

Up to three train cars derailed on the morning of 30 April in the Union Pacific West Colton rail yard, about 65 miles east of Los Angeles, Union Pacific said Wednesday. The cars remained upright during the incident, and cleanup was ongoing as of Wednesday morning.

Renewable diesel market participants said the terminal — a hub for the product — was sold out pending the restart of deliveries, although there was no immediate price reaction in the R99 spot market.

Spot differentials for rail delivered R99 in Los Angeles have ranged from 20-30¢/USG above Nymex ULSD this week.

Renewable diesel deliveries by rail into PADD 5 were down in the first two months of 2024, according to Energy Information Administration data. Rail volumes totaled around 1.19mn bl in February, the lowest monthly total since May 2023 and a 10pc monthly decline after deliveries from the Midwest more than halved from January.

By Jasmine Davis

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02/05/25

Japan’s Saffaire starts supplying SAF to Japan Airlines

Tokyo, 2 May (Argus) — Japanese sustainable aviation fuel (SAF) joint venture Saffaire Sky Energy has started supplying its SAF to Japan Airlines (JAL). This is the company's first SAF delivery to an airline. Saffaire is a joint venture launched by Japanese engineering firm JGC, refiner Cosmo Oil and biodiesel producer Revo International. The delivery of SAF to a passenger flight marks a full-fledged launch of a supply chain that enables the continuous mass-production and supply of SAF in Japan, JGC and JAL announced on 1 May. The JAL plane was fuelled with Saffaire's SAF at Kansai International Airport in western Japan's Osaka, and departed to Shanghai, China, on 1 May. Saffaire will continue to supply SAF to JAL and start supplying SAF to other airlines as well, JGC told Argus . Saffaire supplied SAF to Japan Air Self-Defense Force in April. It announced plans to start delivery to domestic airlines JAL and All Nippon Airways (ANA), the US' Delta Air Lines , Finland's Finnair, Taiwan's Starlux Airlines and German logistics group DHL Express in the 2025 fiscal year. JGC also announced a plan on 24 April to start supplying Saffaire's SAF to Taiwan's Eva Air in the 2025 fiscal year. Saffaire operates Japan's first large-scale SAF plant in Cosmo's Sakai refinery in Osaka, with a production capacity of around 30,000 kilolitres/yr. Saffaire uses used cooking oil (UCO) as feedstock for SAF. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US bill would extend expired biofuel credits

01/05/25

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01/05/25

US bill would extend expired biofuel credits

New York, 1 May (Argus) — Legislation soon to be introduced in the US House would extend expired biofuel incentives through 2026, potentially providing a reprieve to refiners that have curbed production this year because of policy uncertainty. The bill, which will be sponsored by US representative Mike Carey (R-Ohio) and some other Republicans on the powerful House Ways and Means Committee, according to a person familiar, could be introduced as soon as today. It would prolong both the long-running $1/USG for blenders of biomass-based diesel and a separate incentive that offers up to $1.01/USG for producers of cellulosic ethanol. The credits expired at the end of last year but under the proposal would be extended through both 2025 and 2026. The incentives would run alongside the Inflation Reduction Act's new "45Z" credit for clean fuel producers, which offers a sliding scale of benefits based on carbon intensity, though the bill would prevent double claiming of credits, according to bill text shared with Argus . The 45Z credit is less generous across the board to road fuels — offering $1/USG only for carbon-neutral fuels and much less for crop-based diesels — and is still in need of final rules after President Joe Biden's administration issued only preliminary guidance around qualifying. The proposal then would effectively offer a more generous alternative through 2026 for biodiesel, renewable diesel, and cellulosic ethanol but not for other fuels that can claim the technology-neutral 45Z incentive. That could upend the economics of renewable fuel production. Vegetable oil-based diesels for instance could claim the blenders credit and earn more than aviation fuels that draw from the same feedstocks. According to Argus Consulting estimates, aviation fuels derived from wastes like distillers corn oil and domestic used cooking should still earn more than $1/USG this year, conversely, since 45Z is more generous to aviation fuels. Extending the biodiesel blenders credit would also allow foreign fuel imports to again claim federal subsidies, a boost for Finnish refiner Neste and the ailing Canadian biofuel startup Braya Renewable Fuels but a controversial provision for US refiners and feedstock suppliers. The 45Z incentive can only be claimed by US producers. The blenders incentive is also popular among fuel marketer groups, which have warned that shifting subsidies to producers could up fuel costs. The proposal adds to a contentious debate taking place across the biofuel value chain about what the future of clean fuel incentives should look like. Some industry groups see a wholesale reversion to preexisting biofuel credits — or even a temporary period where various partly overlapping incentives coexist — as a tough sell to cost-concerned lawmakers and have instead pushed for revamping 45Z. A proposal last month backed by some farm groups would keep the 45Z incentive but ban foreign feedstocks and adjust carbon intensity modeling to benefit crops. Republicans could keep, modify, extend, or repeal the 45Z incentive as part of negotiations around a larger tax bill this year. But the caucus is still negotiating how much to reduce the federal budget deficit and what to do with Inflation Reduction Act incentives that have spurred clean energy projects in conservative districts. Uncertainty about the future of biofuel policy and sharply lower margins to start 2025 have led to a recently pronounced drop in biodiesel and renewable diesel production . President Donald Trump's administration is working on new biofuel blend mandates, which could be proposed in the coming weeks, but has said little about its plans for biofuel tax policy. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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China issues first export quota for SAF

30/04/25

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30/04/25

China issues first export quota for SAF

Shanghai, 30 April (Argus) — Chinese biodiesel and sustainable aviation fuel (SAF) producer Jiaao Entrotech said today it has received government approval to export SAF from Lianyungang port. The producer has a quota to export 372,400t of SAF this year. It can export the SAF under the same harmonised system (HS) codes as conventional jet fuel, such as 27101911. The new SAF quota is an additional allocation and will not affect the volume of jet fuel export quotas that are regularly allocated to Chinese refiners. Jiaao's SAF plant is located at Guanyun in Lianyungang, a port in east China's Jiangsu province. The plant has 500,000 t/yr of operational capacity. This is the first time the Chinese government has issued an export quota for SAF. Other Chinese SAF producers in the government's approved list will also receive export quotas after further evaluation by Beijing, according to market participants. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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DG Fuels eyes larger, later Louisiana SAF plant

29/04/25

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29/04/25

DG Fuels eyes larger, later Louisiana SAF plant

New York, 29 April (Argus) — US renewable fuels company DG Fuels intends to produce more sustainable aviation fuel (SAF) than it initially planned at its flagship Louisiana project, albeit on a later timeline. DG Fuels president Christopher Chaput told Argus that the company is working to reach a final investment decision on its Louisiana facility by the first quarter of next year and is on track to start delivering "meaningful" amounts of SAF from the site in 2030, later than initially expected. The company continues to look at other potential facilities across the country but is prioritizing its Louisiana plant, which will use the Fischer-Tropsch chemical process to gasify agricultural waste into low-carbon fuels. "Not exclusively, but we are focusing really, really, really hard on the first project, which is Louisiana," Chaput said. Potential sites in Nebraska and Minnesota are the next-furthest along, and the company still owns land in Maine where it could build a similar SAF plant. The facilities would use similar technology but draw from different feedstocks, such as local forest or agricultural waste, and different types of hydrogen. The plan in Louisiana is to produce blue hydrogen, which involves capturing carbon emissions and is eligible for a federal tax credit. That Louisiana facility has also expanded in size, and Chaput says it could ultimately produce 195-200mn USG/yr of fuel — up from estimates last year and an initial projection of 120mn USG/yr. Chaput says the plant's size — which would give it the highest capacity of all Fischer-Tropsch SAF plants planned globally according to Argus estimates — will be an advantage for ultimately producing a cost-competitive fuel. Other potential DG Fuels facilities would be similarly large, a different approach from some other US developers like Aether Fuels, Natural State Renewables and now-defunct Fulcrum Bioenergy that have eyed a similar production process on smaller sites. Some biofuel producers already operational today use a separate process to produce SAF, hydroprocessing vegetable oils and animal fats, and have higher production capacities. But that pathway could ultimately be limited by feedstock constraints and competition from renewable diesel, analysts say, which has spurred investors and airlines to look at other potential pathways. While plants eyeing production in the 2030s might be less exposed to immediate policy risks, biofuel producers in the US have struggled to start 2025 as margins crash from the halting rollout of a new federal tax credit and delayed blend mandates. President Donald Trump's aggressive efforts to curb renewables have scared climate tech start-ups, though Trump has also voiced general support for some other clean energy sources, including biofuels. A government loan to support US refiner Calumet's efforts to produce more SAF was briefly halted this year and then [unpaused]( https://direct.argusmedia.com/newsandanalysis/article/2656961) after a Republican US senator intervened. And policies abroad — including increasingly stringent SAF mandates in the EU and UK — could ultimately support clean fuel developers in the US even if incentives shift stateside. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Brazil's 2025-26 sugar crop to near record 46mn t

29/04/25

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29/04/25

Brazil's 2025-26 sugar crop to near record 46mn t

Sao Paulo, 29 April (Argus) — Brazil may produce a record amount of sugar in the 2025-26 sugarcane crop despite lower crushing because more feedstock is set for the sweetener's production instead of ethanol. Brazil is set to produce 45.9mn metric tonnes (t) of sugar in the 2025-26 crop — which officially started on 1 April — a 4pc increase from the prior season, according to national supply company Conab's first estimate for the cycle. But Conab expects 2025-26 sugarcane crushing to decrease by 2pc from the the prior season, because of unfavorable weather conditions in the months prior to the beginning of the crop. The center-south — responsible for 90pc of national output — was hit by lack of rainfalls and high temperatures in most of last year, harming the development and growing of crops which would be harvested in the current cycle. The planted sugarcane area is expected to reach 8.8mn hectares (ha), a slight 0.3pc rise from the prior cycle, but yields are estimated to decrease by 2.3pc to 75,450 kg/ha. The annual increase in sugar output came because international sugar prices became more attractive than domestic ethanol prices. Both products are derived from sugarcane and production of one occurs at the expense of the other. Additionally, Brazilian mills increased investments on sugar crystallizing capacity last year and market participants expect the results to materialize this season. Ethanol output to fall Brazil will produce 36.8bn l (635,180 b/d) of ethanol in the 2025-26 crop, a 1pc drop from the 2024-25 season, driven by less sugarcane-based ethanol, Conab said. Sugarcane ethanol output is estimated to drop by 4.2pc from the prior cycle, because of less available feedstock and an estimated higher share of sugarcane directed to sugar production instead of the biofuel. But a projected 11pc increase in corn-based ethanol production in the 2025-26 season from the previous cycle partially offsets that expected drop in sugarcane ethanol output. Hydrous ethanol production in the 2025-26 season is estimated to total 22.7bn l, a 6.8pc decrease from 24.4bn l in the 2024-25 crop, while output of anhydrous ethanol — used as a gasoline blendstock — may rise by 10pc to 14.1bn l. By Maria Albuquerque Projections for 2025-26 sugarcane crop 2024-25 2025-26 ±% Sugarcane ('000t) 676.96 663.43 -2 Sugar '000t 44.12 45.87 4 Sugarcane-based ethanol ('000l) 29,350,340 28,111,241 -4.2 Corn-based ethanol ('000l) 7,839,526 8,704,034 11 Ethanol total ('000l) 37,189,865 36,815,275 -1 Source: Conab Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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