Persistent volatility drives consistent uncertainty for renewable diesel and biodiesel producers. With increased regulatory action and production growth on the horizon, alongside mounting geopolitical tensions, stakeholders need a weekly insight into their operational costs and returns.
What happened?
US renewable diesel (RD) margins pressed lower as heavy diesel losses were met by an uneven downturn in feedstocks.
Biodiesel margins stabilized as the soybean oil to heating oil (BOHO) spread held flat week-over-week as diesel losses were met by a weaker May CBOT Soybean oil (SBO) contract.
Used Cooking Oil (UCO) overtook Bleached Fancy Tallow (BFT) as the highest returning feedstock last week as BFT prices posted the slimmest week-over-week losses.
D4 RINs shed value presenting material headwinds to the margin environment, while stronger LCFS credits partially offset losses.
The California Low Carbon Fuel Standard (LCFS) market rose for a second consecutive week.
PBF and ENI announced a 50/50 joint venture, St. Bernard Renewables LLC, to run a new RD plant in Chalmette, Louisiana. The 360mn gallons/yr facility is expected to come online during the first half of 2023 and will include full pretreatment allowing the consumption of 1.1mn t/yr of feedstock.
The Washington State Senate passed a Sustainable Aviation Fuel (SAF) tax credit, following actions from the state of Illinois which issued its own SAF credit with additional tax advantages for the fuel. Washington aims to establish a $1/gallon credit with a $2/gallon cap as additional value can be earned for fuels with lower carbon emissions. The Illinois SAF credit is set at $1.50/gallon and will run from June 1, 2023, through June 1, 2033, making the state the highest returning market for SAF.
