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US regulatory clarity vital to sustain biofuels growth

  • Market: Biofuels
  • 17/09/24

Clarity from both US state and federal regulators regarding the rules and incentives for biofuels production is essential to ensure continued growth to achieve underlying carbon-reduction targets, industry stakeholders said today.

A lack of guidance for incentive programs and qualifications for 2025 and beyond is already hindering trade and investment in key US biofuels markets, panelists said today at the Argus North American Biofuels, LCFS and Carbon Summit in Monterey, California. The current biodiesel tax credit (BTC) is scheduled to give way to the Inflation Reduction Act's Clean Fuels Production Credit (CFPC) in January, while narrowed proposed targets and credit qualifications in state Low Carbon Fuel Standard (LCFS) programs has effectively left key portions of the biofuels market in a holding pattern.

Alignment and certainty between regulatory bodies on what will be incentivized and credited in the future will be an essential component of business and investment decisions in the industry, necessary to reach ambitious carbon-reduction targets within the next decade.

"The fact that we don't have clarity mid-September for a tax credit going into effect on 1 January, is really hard to believe," said Kurt Kovarik, vice president of federal affairs for Clean Fuels Alliance America. "No one knows the rules of the road with respect to 45Z."

Panelists echoed opposition to proposed California caps on crop-based renewable feedstocks that discussed on Monday at the conference during sustainable aviation fuel (SAF) discussions.

"If the goal is to remove carbon, the extent to which we can base it on science and not pick winners and losers is in everyone's interests," Kovarik said. "All you're going to end up doing is limiting the driving out of carbon."

But speakers today further warned of the potential for a duplication of efforts by parties trying to satisfy both state LCFS programs and the federal Renewable Fuel Standard program. Proposed requirements may also require an unprecedented level of collaboration between segments of the US renewables supply chain.

Those requirements could be more disruptive than the feedstock cap itself and potentially have the greatest limiting effect on fuel supply into California, said Don Gilstrap, Chevron's manager of fuels regulations.

With that goal in mind, declining carbon intensity targets are already providing the necessary incentive for producers to pivot away from crop-based renewable feedstocks, Gilstrap said.

But panelists were optimistic about rising interest in replicating LCFS-style focuses on carbon intensity — an approach they theorized would "unleash innovation" across both the finished fuels and feedstocks segments of the industry.


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12/03/25

Northwest European renewable fuel ticket prices rise

Northwest European renewable fuel ticket prices rise

London, 12 March (Argus) — The price of renewable fuel tickets in the UK and the Netherlands has firmed in recent trading sessions, but tickets remain a more competitive option to comply with domestic renewable fuel mandates than physical biofuels blending. Tickets are tradeable credits primarily generated by the sale of biofuel-blended fuels and are used to help obligated parties meet mandates for the use of renewable energy in transport. In the Netherlands, "other" and advanced renewable fuel units (HBE-Os and HBE-Gs) hit a more than three-week high of €11.10/GJ on 6 March, while in the UK, non-crop renewable transport fuel certificates (RTFCs) reached 26.25 pence/RTFC on 5 March, the highest level since 29 January. Despite the increase, RTFCs are at a discount to the like-for-like blend value of used cooking oil methyl esther (Ucome) biodiesel and hydrotreated vegetable oil (HVO) Class II ( see graph ). And in the Netherlands, HBE-Gs remain well below the like-for-like blend value of palm oil mill effluent (Pome) oil-based HVO (Class IV). This typically discourages obligated parties to physically blend biofuels. Biodiesel and HVO prices increased on higher feedstock costs, market participants said. The premiums of HVO Class II and IV against the HVO-escalated 7-28 day Ice gasoil price reached $800/m³ and $785/m³, respectively, on 7 March, the highest since 12 February. Meanwhile, the Argus Ucome biodiesel fob ARA price rose to $1,453.24/t on 4 March, its highest since 3 December. And last week, the Argus UCO fob ARA assessment hit its highest level since October 2022, driven by low supply in the ARA region and a stronger euro against the US dollar. A closed arbitrage with China, Europe's biggest importer of UCO, is putting further pressure on supply in the region, market participants said. UCO trade flows shifted away from Europe last year as significant amounts of Chinese product moved to the US at the expense of flows elsewhere. But there may be some relief for European buyers in 2025 as US buyers wait for clarity on the Inflation Reduction Act's carbon intensity-based 45Z credit. President Donald Trump's doubling of pre-existing tariffs on Chinese imports to the US to 20pc is yet to have an impact on the European market, although participants said it could put a ceiling on further price gains. SAF blending pressures HBE-IXBs HBE-IXB tickets — generated by blending biofuels made from feedstocks listed in Annex IX part B of the EU's Renewable Energy Directive — have been moving in the opposite direction. The Argus Netherlands HBE-IXB price softened to its lowest since October last year on 13 February, at €9.50/GJ (see graph) . It has since risen slightly, reaching €9.75/GJ on 11 March. The tickets are under pressure from stronger supply as some are being offered by sustainable aviation fuel (SAF) blenders, market participants said. Biofuels in aviation benefit from a 1.2x multiplier, in addition to the double counting rule for waste feedstocks. An EU-wide SAF mandate — ReFuelEU — came into effect on 1 January, replacing national obligations. Under the mandate, fuel suppliers will need to include 2pc SAF in their jet fuel deliveries in 2025, rising to 6pc in 2030. UCO-based hydrotreated esters and fatty acids synthesised paraffinic kerosine (HEFA-SPK) is the most common type of SAF available today. In the Netherlands, blending HEFA-SPK SAF into jet fuel can generate HBE-IXBs. But the Dutch ministry of infrastructure is consulting on its second draft to transpose the recast RED III . If the current draft is implemented, the Netherlands will introduce greenhouse gas (GHG) emissions reduction mandates from 2026 for land, inland shipping and maritime shipping. The first draft also included an aviation subcategory, but it was removed in February . GHG-quota by blending less lucrative in Germany The increase in biodiesel and HVO prices in the ARA region has not had an impact on German GHG certificates. Buying GHG certificates remains more cost effective than physical blending for fuel suppliers. But market participants anticipate prices rising from the end of March, which could reverse this trend. Overall blending in Germany is expected to increase this year to generate new GHG tickets, after carry-over was frozen, forcing producers to build their GHG balance from scratch in order to fulfil their 2025 quotas. Many market participants remain focused on their 2024 balance for now, and demand for advanced biofuels and HVO in Germany has been slow so far this year. By Evelina Lungu Ucome and HVO Class II versus RTFCs p/litre Advanced FAME 0 versus German €/t CO2e Ucome and HVO Class II versus HBE-IXB €/GJ HVO Class IV versus HBE-G €/GJ Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Brazil refinery to produce fuel from eucalypt


11/03/25
News
11/03/25

Brazil refinery to produce fuel from eucalypt

Sao Paulo, 11 March (Argus) — Petrobras-controlled Riograndense refinery successfully conclude tests to produce fuels from eucalyptus biomass in Brazil's southern Rio Grande do Sul state. The refinery used a bio-oil from eucalyptus biomass and converted it in fractions of fuel gas, LPG, components to produce gasoline and marine fuel with renewable content and others. The bio-oil came from industrial company Vallourec's forest unit in southeastern Minas Gerais state. The test reveals the possibility of using wood and other forestry residues as feedstocks for products usually coming from a fossil origin, said Petrobras's technology, engineer and innovation director Renata Baruzzi. Petrobras intends to transform Riograndense refinery into the first oil plant to produce 100pc renewable fuels in the world, according to Petrobras' chief executive Magda Chambriard. The efforts are part of Petrobras' BioRefino program, which will invest almost $1.5bn to generate sustainable fuels as of 2029. Riograndense refinery is also controlled by Brazilian companies Ultra Group and Braskem petrochemical. By Maria Albuquerque Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU consults on decarbonisation, clean tech aid


11/03/25
News
11/03/25

EU consults on decarbonisation, clean tech aid

Brussels, 11 March (Argus) — The European Commission has opened a consultation on updates to its state aid rules, which aim to take into account the bloc's proposed clean industrial deal — designed to simplify and speed decarbonisation. The commission is aiming to publish the rules in June, following input from EU states. The updated state aid rules would then apply to how the commission decides on EU states' financing of projects up until the end of 2030. The draft provides for member states' simplified tender procedures for renewables and energy storage. The commission specifically notes the possibility of granting aid without tender for less mature technologies, such as renewable hydrogen. There would also be more flexibility for EU states aiding industrial decarbonisation, with a choice of tender-based schemes, direct support and new limits for very large projects. The commission lists batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage among clean technologies that can be supported, as well as their key components and critical raw materials. Officials note the possibility of EU countries de-risking private investment. The rules, when adopted, would also allow for investment in storage for renewable fuels of non-biological origin (RFNBOs), biofuels, bioliquids, biogas, biomethane, and biomass fuels as long as they obtain at least 75pc of their content from a directly connected and related production facility. Aid can only be granted for biofuels, biogas, and biomass fuel production if compliant with the bloc's renewables directive. While the rules for biofuels are not new, they do reflect the wider scope of aid now foreseen by the commission. And officials say the rules allow for projects in the EU to receive aid from a member state if a comparably project would receive aid in a third country. The commission released its proposed clean industrial deal in late February . The deal targets a simplification of rules, to allow EU member states to aid industrial decarbonisation, renewables rollout, clean tech manufacturing and de-risking private investments. Today's consultation runs until 25 April. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US SAF projects will be protected: United Airlines


10/03/25
News
10/03/25

US SAF projects will be protected: United Airlines

Houston, 10 March (Argus) — US sustainable aviation fuel (SAF) projects will move forward despite the US administration pushing back against earlier legislation that supports renewables, the head of United Airlines said today. SAF has bipartisan support in Congress and at the state level and is likely to be protected, United chief executive Scott Kirby said at the CERAWeek by S&P Global conference in Houston, Texas. Electrification is not practical in large scale aviation and hydrogen has a different set of problems, leaving SAF as the better option, Kirby said. The US has provided strong incentives to develop SAF under laws passed during the administration of former-president Joe Biden and will likely produce enough to export to Europe to help that continent meet aggressive targets. US president Donald Trump issued an executive order upon taking office which paused all disbursements of funds appropriated through the Inflation Reduction Act (IRA) passed in 2022 and a complementary infrastructure law passed in 2021. The order called for ending the "Green New Deal", echoing language he used on the campaign trail when criticizing the IRA. Trump said the funding should be held back until federal agencies "review their processes, policies and programs for issuing grants, loans, contracts or any other financial disbursements" to ensure they fit with policy objectives. United announced in December that it agreed to buy SAF from Phillips 66's Rodeo facility in northern California as soon as the product came online. The airline inked a similar deal with Neste last year for SAF as it continues to take advantage of the Illinois SAF buyers' tax credit in supplying its major hub at Chicago's O'Hare International Airport. Other US independent refiners have recently announced that SAF projects are advancing. Specialty refiner Calumet said last month that a project to expand SAF production in Montana is moving forward after it received an initial $782mn loan from the US Department of Energy (DOE). The funding is the first portion of a $1.44bn loan from the DOE that will allow Calumet subsidiary Montana Renewables to expand operations at its Great Falls, Montana, biofuel plant. The loan was paused temporarily earlier this year as the Trump administration conducted a review to confirm "alignment with White House priorities." Another US independent refiner, Par Pacific, said it is seeing strong interest in its planned renewable fuels facility at its 94,000 b/d Kapolei, Hawaii, refinery. The $90mn project, which will produce SAF and other products, is on schedule to start up in the second-half of 2025, Par Pacific said. Meanwhile, US independent refiner Valero said recently that its project to produce up to 15,000 b/d of SAF at its refinery in Port Arthur, Texas, is fully operational. The project allows the plant, jointly owned with Diamond Green Diesel (DGD), to upgrade up to 50pc of its 31,000 b/d renewable diesel refining capacity to SAF. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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California lawmakers in new push for E15 blend


07/03/25
News
07/03/25

California lawmakers in new push for E15 blend

Houston, 7 March (Argus) — California lawmakers continue to weigh resources for state regulators to expedite their review of higher-ethanol gasoline blends this legislative session. Dovetailing with a request from governor Gavin Newsom (D) in October 2024 to speed the California Air Resources Board's (CARB) review, state legislators are considering several bills to appropriate the needed funds and authorize California to allow the use and sales of a 15pc ethanol blend (E15). AB 30, sponsored by Assembly members David Alvarez (D) and Heath Flora (R), would require CARB to complete a rulemaking allowing blends up to E15 by 1 July, citing the urgency of lowering fuel costs in the state. If the agency cannot meet this deadline, the bill would automatically approve these higher blends for sale. Currently, the state does not allow blends higher than E10 because of environmental concerns, such as the potential for increased emissions of NOx, which contributes to smog. "E15 is already approved in 49 other states so it's high time that California joins in," Alvarez's office said. The bill is currently before the Assembly Natural Resources Committee. But its timeline would be difficult for CARB to meet. To get to the point where it could hold a rulemaking to allow E15, the agency first must finish the multi-tier study it began in 2018, at the direction of lawmakers, to evaluate adoption of the higher blend. On average, the process lasts two to five years and requires a workgroup to determine whether any new fuel will have new environmental or public health impacts. Transportation-related greenhouse gas (GHG) emissions remain the largest obstacle to the state's climate goals, which include a 40pc reduction in emissions by 2030 from 1990 levels, and net zero in 2045. This sector accounted for 139.9mn metric tonnes, or 37.7pc, of statewide emissions in 2022, the most recent year for data. While state officials have set increasing targets for electric and zero-emission vehicle adoption, the economy and consumer demand still center on conventional fuels, with retail price spikes prompting Newsom to call a special session last year and reigniting the push for use of E15. The state effort joins other recent E15 initiatives on the regional and nationwide level. In February, a group of bipartisan US lawmakers introduced legislation that would make E15 available year-round. The higher blend currently is not available during the summer months because the federal Clean Air Act extends a fuel volatility waiver to E10 gasoline but not E15. The bill could be incorporated into larger government funding packages later this year. In addition, a host of midcontinent states are set to gain year-round access to E15 beginning on 28 April — a measure that oil groups have opposed because of logistical challenges of supplying the required boutique gasoline blendstock on a regional basis. But the growing federal focus on E15 does not allow California to bypass its process to adopt new fuels. CARB completed the report required by Tier I of this process in 2020 but must still finish the outstanding reports required under the next two tiers, including addressing issues like data gaps and the suitability of the fuel. The agency has also said it needs to address the potential for increased participation in the state Low Carbon Fuel Standard (LCFS) and other programs as a result of rising production and consumption of E15. CARB is seeking $2.3mn in ongoing funds for additional staff and resources to complete the review, which it estimates could be done by mid-2025, as part of the 2025-26 state budget. But the agency would not adopt regulations until the second quarter of 2026, well past the deadline in AB 30. The governor's January budget proposal , now reflected in budget bills AB 227 and SB 65, included nearly $2.3mn/yr to support completion of the study. But the state's nonpartisan Legislative Analyst's Office (LAO) last month recommended limiting the funding to two years and later consider additional money if CARB decides to adopt E15. By Denise Cathey and Payne Williams Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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