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Biodiesel gross screen margin keeps rising +52% in last 3 months


Steady rise in heating oil/Gasoil and a drop in vegetable oil prices have boosted gross margin in both US and EU on Biodiesel. The screen crush margin expressed in USD per gallon includes BTC but does not take into account RINs and LCFS as well as various other State incentives. Meanwhile in Nortwest Europe FAME sells for $1231/mt flat price or $173/mt gross margin while on UCOME that sells for $1366/mt flat price, we are looking at $308/mt gross margin. There are no shortages of product in the market despite regulatory threats in EU with the impending decision on counter vailing duties on UCOME imports from China and in the US with the Senate involvement in questioning UCO imports from China. Strong diesel prices are good for the Biodiesel/Renewable diesel sector and supporting both margin and demand. I should state that the US Senate involvement in UCO imports show that this is having a serious impact on the crushing business in US but they are not taking into account Tallow imports which have increased dramatically as well. The main issue is that there has been significant investments made in the crushing industry for Soya while imports have deflated that bullish balloon significantly as Soy farming and crushing carbon intensity is generally poor even when you apply the GREET model.




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