BOPO Surges as Indonesia Delays B50

The biodiesel complex finally broke out of its muted pattern today as BOPO surged more than 6%, marking the strongest daily move in weeks within the vegoil complex. The widening spread between soybean oil and palm oil reflects renewed support for soyoil, as palm weakened on confirmation that Indonesia will delay its B50 rollout and instead explore an ethanol blending mandate. The shift, reported by state media and Reuters, removes a key demand pillar for palm-based biodiesel and rebalances global vegetable-oil dynamics. Palm now acts as the structural floor of the complex, cushioning downside risk but ceding price leadership back to soyoil.

In Europe, physical barge activity picked up in the ARAG window. RME producers were active sellers, closing deals near $725/mt above ICE Gasoil, while UCOME held firm above $820/mt, widening the UCOME/RME spread to +$97/mt fp. The change reflects tighter waste-oil availability and a cautious stance among advanced producers ahead of RED III implementation. FAME 0 traded at $1,334/mt, equivalent to +660 $/t over ICE Gasoil. While not the strongest premium this year—it briefly topped +700 $/t in early summer—the level still highlights biodiesel’s resilience versus fossil diesel despite weaker liquidity. The RME/FAME spread hovered near €65/t.

The soft-oil complex in northwest Europe showed another important shift: rapeseed oil and soyoil prices have finally converged. Dutch-origin soyoil was offered around €1,075/t for Dec–Apr delivery, nearly identical to rapeseed oil at €1,075/t FOB, ending a months-long differential that had kept RSO under pressure. With this parity now in place, crushers will likely reassess run rates into late Q4—especially given subdued export demand and the structural loss of Shell’s Rotterdam biorefinery, which officially cost the company a $600 million write-down. The cancellation acts as a scarecrow for other investors currently building or considering HVO capacity, underscoring how vulnerable capital-intensive renewable-diesel and SAF projects remain to feedstock volatility, uncertain credit regimes, and rising financing costs.

HVO Class II values stayed supported around $2,611/t, while SAF eased slightly below $2,700/t, narrowing the spread further. Traders defended HVO premiums even as RME margins were sold off in paper—a clear sign that the market is bifurcating between waste-oil and crop-based supply streams.

Across the Atlantic, the U.S. market remains gridlocked under the ongoing government shutdown. D4 RINs hover near $1.05, modestly firmer on expectations of lower output but directionless without fresh data or policy guidance. Frustration is mounting among farmers after another delay in the administration’s farm-aid announcement, now postponed indefinitely. Meanwhile, traders appear to underestimate the knock-on impact of the USTR’s Section 301 maritime fees, effective October 14. The new tariffs—up to $50 per net ton on Chinese-built or operated vessels—come on top of freight rates that are already sharply higher than a year ago across nearly all routes. The added cost burden will inflate logistics for bulk agricultural exports. While biodiesel exports remain constrained by destination duties, the broader drag on soybean and grain shipments could swell domestic feedstock inventories and further pressure crush margins heading into Q4.

For biodiesel traders, today’s signals are clear: BOPO is back in play, physical RME is being monetized, and feedstock parity is redrawing the European margin map. If BOPO holds above 6% into next week, this shift could redefine the balance between palm and soft oils heading into the year-end run.