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 increased to four-month highs last week as feedstocks continued to post losses against a negligibly higher April Nymex ULSD contract.
Soybean oil (SBO) gained leaving biodiesel margins at the weakest level in two and a half months as the more actively traded April Nymex ULSD contract was little changed week over the week.
Used cooking oil (UCO) remained the highest returning RD feedstock last week.
RIN markets proved supportive to margin environment as buying returned to the market as the EPA heard comments from the advanced biofuels industry urging higher mandates. RIN traders largely shrugged off healthy January D4 RIN production data and two new Small Refinery Exemption (SRE) petitions, one for 2022 and one for 2023.
The California Low Carbon Fuel Standard (LCFS) market saw demand return last week. LCFS has been trending higher since February 7, 2023, despite record oversupply. A solid contango structure as crystalized in the LCFS spot forward curve.
PBF and ENI announced a 50/50 joint venture, St. Bernard Renewables LLC, to run a new 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 consumption.
