Another Round of Mixed Signals and Weakening Freight as China Trade Fight Resumes

Trump’s latest comments attacking the IMO’s global carbon-tax proposal for shipping added another layer of confusion to an already unsettled market. He called it a “Global Green New Scam Tax on Shipping,” even as his own administration’s Section 301 tariffs continue to raise costs for shipowners and operators by extending duties to shipping-related goods and services. With the China trade war heating up again, the Baltic Clean Tanker Index dropped about 5 percent as charterers stepped back, highlighting how policy uncertainty and tariffs are already distorting global freight. For biodiesel and renewable diesel traders, this web of conflicting policies makes forward planning increasingly difficult, notwithstanding that the industry had been preparing to supply large volumes of UCOME and other biodiesel products to the maritime industry in view of these upgrades of IMO rules.

In the United States, biodiesel sentiment remains cautious. D4 RINs inched higher to $1.083/gal for December 2025 and $1.147/gal for December 2026, but overall diesel sentiment remains soft. Falling energy prices provide a touch of input relief, yet what is bearish for gasoil or diesel is also bearish for biodiesel and renewable diesel. Lower utility costs cannot offset weaker demand or logistical friction from tariff-driven freight inflation.

In Europe, ICE gasoil—the regional distillate benchmark—traded near $641/mt, extending its downward run and putting additional pressure on biodiesel margins. In the ARAG window, producers continued to sell aggressively, with RME at $1,385/mt, FAME 0 at $1,316/mt, and UCOME at $1,486/mt. Against Dutch rapeseed oil at €1,100/mt and a firmer EUR/USD of 1.17235, the implied RME gross margin narrowed to around $95/mt, the lowest in weeks. HVO Class II was quoted at $2,565/mt, with SAF at $2,666/mt, showing the renewable diesel–aviation spread compressing further.

Soft-oil prices in Northwest Europe held firm, with RSO at €1,100/mt, SBO at €1,085/mt, and sunflower oil at $1,360/mt FOB N. Europe. The stronger euro continues to inflate feedstock costs in dollar terms, limiting any benefit from cheaper energy inputs. Meanwhile, Indonesia’s new export-tax regulation, effective October 15, placed POME and high-acid residues under the same combined levy and duty structure as crude palm oil, capped near $175/mt. The move closed the tax-free window for waste-oil exports overnight, tightening global supply and supporting UCOME premiums into Europe.

UFOP data show the EU imported just under 3.3 million tonnes of soybeans between July and early October, down roughly 129,000 tonnes from the prior year. Brazil shipped 1.8 million tonnes (-14%), the U.S. 0.97 million tonnes (+7%), and Ukraine 0.35 million tonnes (+45%). Early stockpiling ahead of the postponed EU Deforestation Regulation inflated summer arrivals, but crushers remain long on meal rather than oil, keeping rapeseed demand and RSO values supported.

Across both sides of the Atlantic, policy inconsistency, freight volatility, and weak diesel fundamentals leave biodiesel and HVO producers navigating an environment where every relief seems to come with a new constraint. The only bright spot—lower energy costs—carries the same bearish signal that weighs on diesel demand. Until freight steadies and policy direction becomes clearer, margins will remain narrow and visibility limited for the biofuels complex.