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.
Viewpoint: US policy shift elevates domestic feedstocks
Viewpoint: US policy shift elevates domestic feedstocks
Houston, 2 January (Argus) — US biofuel producers may increasingly turn to domestic feedstocks as restrictive biofuel and trade policies limit the use of foreign materials. The clean fuel production tax credit, known as 45Z, launched in 2025 to replace the $1/USG blender's tax credit. Under 45Z, foreign used cooking oil (UCO) became ineligible for credits, while foreign tallow retained access until tariffs introduced in the third quarter disrupted trade. Starting in 2026, 45Z will apply exclusively to biofuels made from North American feedstocks , effectively excluding all other foreign products. President Donald Trump's administration's push to curb imports aims to strengthen domestic feedstocks, particularly soybean oil, in US biofuel production. US soybean crush capacity has grown by 13pc since 2022, reaching 2.97bn bushels (bu)/yr w ith the addition of 10 new crush plants. Expanded capacity drove a record 227.6mn bu of soybean crush in October, with multiple monthly records set throughout 2025. The US biodiesel sector continues to rely on soybean oil as its primary feedstock, with soybean oil accounting for roughly 70pc of the biodiesel feedstock mix in 2024. Meanwhile, the renewable diesel (RD) and sustainable aviation fuel (SAF) industries have increasingly targeted lower-carbon feedstocks to maximize credit value, resulting in soybean oil demand failing to meet the demand expectations of crushers. Agricultural lobbyists have long blamed foreign feedstocks for displacing domestic crop-based materials and have consistently pushed for restrictions. Heavy imports since early 2023 sidelined domestic supply, with Chinese UCO flooding the market and Brazilian and Australian tallow following suit. This surge drove record-high UCO consumption in July 2024, while tallow hit its own record in July 2025 . Feedstock imports slowed in the second half of 2025 with new 45Z rules and import tariffs. Chinese UCO shipments in January-October 2025 fell by 65pc from a year earlier, while Brazilian tallow volumes plunged below 22mn lbs in the fourth quarter after 50pc tariffs were imposed in August, down from a record 154mn lbs in June. Australian tallow maintained strong flows until October despite 10pc tariffs, but volumes were expected to decline in late 2025 and beyond as 45Z restrictions take effect. In June, the Environmental Protection Agency (EPA) proposed record-high blending requirements for 2026 and 2027 , alongside a measure to halve Renewable Identification Number (RIN) credit generation for fuels made abroad or from foreign feedstocks. This proposal sparked a rally in domestic feedstock prices, with most categories hitting yearly highs in July. Agricultural lobbyists and waste-based feedstock suppliers support these RIN changes, viewing them as a boost for domestic feedstock demand. But optimism for domestic feedstocks is tempered by uncertainty surrounding the 45Z credit and delays in biofuel mandates, which are expected to extend into 2026. The Trump administration confirmed in December that mandates would not be finalized before year-end, leaving market players without guidance about final mandatory volumes and potential import RIN credit cuts. Also in December, the US Department of the Treasury submitted a new 45Z proposal to the White House , as market participants seek updated guidance on filing tax credit claims for 2025, though officials will likely permit the use of existing guidance for 2025 claims. This lack of clarity has triggered production cuts across multiple RD plants nationwide. Biofuel refiners such as Phillips 66 and Diamond Green Diesel have publicly announced rate reductions as renewable diesel margins dipped below 2024 levels. Some refiners continued tapping foreign feedstocks until December, avoiding some tariffs by claiming duty drawbacks and exporting the finished fuel abroad. Others remain cautious, as the half-RIN provision, if finalized, poses a significant risk to margins. Looking ahead, existing tariffs, new 45Z policies, record-high biofuel mandates, and the half-RIN provision are expected to support soybean oil demand in first-quarter 2026 as producers seek to maximize credits through domestic feedstock use. US soybean oil futures closed at 49.44¢/lb on 30 December, down by 14pc from their July peak of 57.54¢/lb, making soybean oil more attractive compared to waste-based feedstocks. Agriculture groups claim that expanded crush capacity and record production will provide sufficient soybean oil to meet biofuel demand, reducing reliance on imported feedstocks. In addition, the 45Z credit premium for soybean oil is expected to rise in 2026 as regulators stop considering potential land-use impacts of crop-based fuels, narrowing the gap with credit values for waste-based feedstocks. Soybean oil is also positioned to gain a competitive advantage over canola oil, which receives a roughly 50pc lower credit value. By Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Viewpoint: US jet fuel output seen rising with demand
Viewpoint: US jet fuel output seen rising with demand
Houston, 31 December (Argus) — US jet fuel production could increase in line with airline demand in 2026 despite the Energy Information Administration's (EIA) projections of a production decrease due to biofuel blending policy for road fuels. The International Air Transport Association (Iata) expects global airline demand to increase in 2026, with global passenger volumes expected to reach 5.2bn, up by 4.4pc compared to 2025, while cargo volumes are expected to increase by 2.4pc to 71.6mn t. But the EIA reported in its December Short-Term Energy Outlook that 2026 jet fuel production will average 1.73mn b/d, down by 4.9pc compared to 2025estimated average, noting weakening demand in the next year. The agency expects the first quarter production to average 1.71mn b/d and the fourth quarter production at 1.68mn b/d, keeping the full-year production average down. But a number of factors — including continued use of less fuel-efficient jets and higher costs for meeting US road biofuel rules — should support US jet fuel production. Jet output is expected to keep pace with 2025 levels or higher, averaging 1.81mn b/d, Argus Consulting forecasts. Bottlenecks in the production of more fuel-efficient next-generation aircraft delayed the flow of new planes this past year, and are expected to worsen, limiting growth in the aviation section until at least the 2030s. Aircraft delivery delays from major manufacturers like Boeing have increased over the past year due to several factors, including tariffs on metals and electronics deriving from US-China trade tensions and engine production outpaced by airframes output. Costs around US biofuel blending obligations, particularly for distillates like biodiesel and renewable diesel, are also supportive of jet fuel production. Prices for D4 and D6 RINs, which reflect the cost of meeting Argus Renewable Volume Obligations (RVO) for biodiesel and ethanol, respectively, rose during 2025, from 9.45¢/USG on 2 January, cresting at 17.04¢/USG in June, before falling to roughly 15¢/USG for much of December. In June, the EPA proposed record-high blending targets in the biomass-based diesel category for the next two years — which will likely make compliance costs for those fuels even more expensive. But unlike road fuels such as gasoline and diesel, jet fuel is not bound by these blend mandates under the RFS. This means refiners looking to taper their blending obligations may retool production assets for more jet fuel and less diesel. A number of refiners are already making that pivot. Marathon Petroleum, one of the largest US independent refiners, is spending millions of dollars to increase jet fuel capacity at its 253,000 b/d Robinson, Illinois, refinery, which is expected to be completed by the end of 2026. US independent refiner HF Sinclair is also planning to boost jet fuel capacity at its 145,000 b/d Puget Sound refinery in Anacortes, Washington, to help serve the western US market, the company said in a third-quarter earnings call. CVR Energy started producing jet fuel at its 132,000 b/d Coffeyville, Kansas, refinery during the third quarter of 2025. Another independent refiner, Delek, has upgraded its 83,000 b/d El Dorado, Arkansas, refinery to produce jet fuel, the company said in May. The EIA does expect more demand for jet fuel in 2026. The product supplied projections for 2026 in the latest STEO was 1.74mn b/d, up by 0.6pc compared to 2025. But it still projects first quarter production to drop to 1.61mn b/d and fourth quarter to reach 1.72mn b/d, with second and third quarter projections higher at 1.82mn b/d and 1.81mn b/d, respectively. Originally expected to be finalized in late 2025, the EPA is set to confirm biofuel blending targets, as well as consider the reallocation of exempted volumes approved during 2025 in the first quarter of 2026 . Doing so would provide biofuel producers and obligated parties alike with a clearer view of expectations for 2026 and 2027. Unless biofuel production overshoots the thresholds for blending demand, or the EPA chooses not to reallocate a substantial volume of small refinery exemptions, market participants anticipate further continued strength for RIN prices. If these mandates do come to fruition and toughen the obligation refiners face for producing diesel, retooling and pivoting to a higher jet output would alleviate the added cost of producing finished road fuels. By Hunter Fite and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: Asia's shipping faces uncertainty in 2026
Viewpoint: Asia's shipping faces uncertainty in 2026
Singapore, 31 December (Argus) — The adoption of green marine fuels in Asia's shipping sector is expected to slow in 2026, following a turbulent year marked by the International Maritime Organization's (IMO) deferment of its proposed Net Zero Framework (NZF) in October. The sector is revisiting investment plans affected by geopolitics and global policy making, and faces further challenges in the year ahead . Biofuel blends slow down "We don't see a sizeable increase in bio-bunker [demand next year]," a key Singapore-based trader said. Year-on-year demand for biofuel blends at the port of Singapore dropped by 46.6pc to 62,200t in November, preliminary data from the Maritime and Port Authority of Singapore (MPA) show. Demand for bio-bunkers is likely to be slow but steady in 2026 compared with this year. The implementation of RED III affected this market throughout the last quarter of 2025, the trader said. Trading of used cooking oil methyl ester (Ucome) based blends with very-low-sulphur fuel oil (VLSFO) and high-sulphur fuel oil (HSFO) has been slow because buyers anticipate tighter sustainability rules and the exclusion of key waste-based biofuels under RED III . This is likely to raise compliance costs and redirect European demand toward advanced grades. But total bio-blend consumption in Singapore reached 1.2mn t during January-November this year, 42.8pc higher than the full-year total for 2024. Biofuels were the first alternative fuel adopted by the shipping sector, and their adoption has grown quickly since 2022. But a slowdown in demand could occur in 2026 because of uncertainty following the deferment of key frameworks under the IMO's NZF. The IMO's proposed Life-Cycle Assessment (LCA) Guidelines are one of these frameworks. The LCA guidelines aimed to help shipowners calculate their compliance on a well-to-tank (WtT) and tank-to-wake (TtW) basis. LNG poised for further growth LNG as a bunker fuel maintained its robust consumption growth in Singapore this year. Total LNG consumption was 631,000t in January-November, up by 36pc from the same period a year earlier. LNG bunkering is growing at key ports in China , and infrastructure has developed throughout this year. But LNG barges remain a bottleneck, with only a handful available across the Asia-Pacific region. Three barges are operational in Singapore, with a few more on the order books. The estimated $80mn cost to build an LNG barge is a key deterrent. Growth in LNG bunkering is likely to continue as Asian shipowners have invested in building LNG-fuelled vessels. The total number of LNG dual-fuelled newbuilds on order books was 966, the highest for any alternative fuel, the latest data from Norwegian classification agency DNV show. Conventional bunkers anchor demand Alternative fuels are the focus of the latest developments in marine fuels, but conventional fossil fuels remain an option because of their lower price . The shipping sector's firm demand for conventional fuels was reflected in sales in Singapore. Year-to-date sales accounted for 96pc share of the total bunker consumption at around 49.5mn t from January to November, MPA data show. HSFO demand is likely to stay supported in the coming year, especially if ample supplies in Asia continue to weigh on prices in the near term. Most shipowners and charterers still prioritise crew safety, opting for the longer shipping route around the Cape of Good Hope instead of travelling through the Red Sea, where there are possibilities of maritime attacks by Yemen's Houthi group. Refuelling with HSFO instead of VLSFO translates into significant cost savings and payback on scrubber investments for vessel owners, while allowing ships to comply with 0.5pc sulphur emission caps. The scrubber spread, the price difference between VLSFO and HSFO, averaged $74.38/t this year as of 26 December. Moving forward, demand for conventional fuel oil in Singapore will likely be sustained, as over 97pc of ships in operation do not have alternative fuel technology, DNV data show. But further growth in conventional fuel buying interest may be capped, given the shipping sector's transition to net-zero carbon fuels. The number of ships capable of operating on alternative fuels is set to nearly double between 2024 and 2028 based on the current order book, DNV said in its Maritime Forecast to 2050. "Trading patterns, cargo owners' willingness to pay a premium for green transport, asset value, and technical challenges affect shipowners' willingness to invest in alternative fuel-capable ships," DNV said. Mahua Mitra and Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: EU policy to boost Asia spec tanker demand
Viewpoint: EU policy to boost Asia spec tanker demand
London, 30 December (Argus) — EU legislation and new biofuels mandates should drive up 2026 demand for specialised tankers to move biofuels and renewable feedstocks from Asia-Pacific. This could offset any loss in US demand because of new terms in its 45Z tax credit policy. Exports of biofuels and feedstocks to Europe make up the bulk of long-haul demand for specialised tankers in Asia-Pacific. This trade should grow in 2026 when EU states implement the revised renewable energy directive (RED III). But many of the EU's largest biofuels consumers — including Germany, France, Italy and Spain — missed the 21 May 2025 deadline, and some have pushed back launch dates to 2027, which may limit the export surge that market participants were forecasting for 2026. Germany's new legislation should offer partial support. As the EU's largest biofuels consumer, its RED III transposition is pivotal. The German cabinet approved legislation to implement the EU's RED III into national law on 10 December, including provisions to end double-counting of advanced biofuels made from waste products, such as used cooking oil (UCO) or tall oil. This would require a much higher amount of physical biofuels to reach the same level of greenhouse gas (GHG) credits, driving up consumption. The bill still needs to pass through Germany's lower and upper parliaments for debate, meaning it is unlikely it will pass into law until later in 2026. But the abolition of double counting will apply to the entire compliance year, so it will be retroactive to 1 January. Hydrotreated vegetable oil (HVO) is the primary way to reach blending targets, because ethanol and biodiesel have strict blend walls limiting any sizeable jump in consumption. Higher HVO demand will probably require a rise in imports from Singapore, given the EU has anti-dumping duties on US and Chinese product. This will buoy demand for specialised tankers in southeast Asia in 2026, although a larger demand rise will depend on RED III implementation across the bloc. Fading US incentives New terms of the US' 45Z tax credit scheme, which will only incentivise biofuels produced using feedstocks from the US, Canada or Mexico from 1 January 2026, have already weighed on imports from Asia-Pacific. Some wider trade should continue as certain biofuels producers buy feedstocks to produce for export markets. Prices of north American feedstocks should eventually be pushed up to parity with other feedstocks, making the latter competitive in US markets even without the 45Z. While this would kick out exports from Asia-Pacific again, these dynamics will take some time and will probably leave flows reduced in the early months of 2026. US demand for biofuels and feedstocks from Asia-Pacific had tapered off in 2025, meaning further losses in exports should be easily offset by growth in trade to Europe — supporting specialised tanker rates. Around 43pc of the 15.2mn t of biofuels and renewable feedstocks exported from Asia-Pacific in 2025 headed to Europe, and only around 13pc to the US, Kpler data show. This means a loss in exports to the US could be easily offset by growth in European demand. If exports to the US dropped by 50pc in 2026 to just under 1mn t, there would need to only be a 15pc jump in exports to the EU, to around 7.5mn t, to keep overall exports from Asia-Pacific flat on the year. By Leonard Fisher-Matthews Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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