Europe’s FAME Hits Records While U.S. Biofuels Brace for US Crop Deluge

With U.S. markets shut for Labor Day, Europe set the tone today. Window trades saw RME at $745–760/mt, FAME 0 at $690–700/mt (+696 over ICE gasoil, a record premium in Europe), and UCOME steady at $825–830/mt. Spreads remained resilient — RME/FAME near +55 and UCOME/FAME at +130 — while flat prices followed firmer gasoil. RME gross margins in NWE are holding above $150/mt and UCOME still tops $250/mt.

These levels are unprecedented when viewed against the BOGO spread at +450, with the forward curve showing a -67/mt contango into Mar 2026. The disconnect highlights how physical tightness in Europe has driven premiums well beyond paper valuations.

Paraffinic fuels remain elevated, with SAF assessed near $2,648/mt. Adding to momentum, Alaska Airlines and Cosmo Oil Marketing signed a SAF supply deal for Hawaiian Airlines’ Osaka–Honolulu flights, a reminder that Asia-Pacific producers are expanding their transpacific reach while Europe provides today’s liquidity.

Macro drivers point to caution: palm oil futures snapped a three-week rally, pressured by weaker crude and rival oils, while VLCC floating storage fell sharply, easing some crude inventory pressure. Aframax floating storage are moving correspondingly higher on influx of Russian fuel oil.

In the U.S., D4 RINs settled Friday at $1.087, continuing their steady decline since July.

Fresh EIA data showed U.S. biodiesel/renewable diesel feedstock use in June 2023 down 16.4% y/y. Tallow gained share at 26% of the mix vs. 17% last year (+25%), while soybean oil consumption fell 21.5% y-o-y. Meanwhile, the U.S. biodiesel screen crush remains deeply negative at 45 cents/gal, extending to 52 cents/gal down the curve — a stark contrast with Europe’s record-high physical premiums.

The next 4–6 weeks will be critical for U.S. biofuels, with a record corn and soybean harvest about to be cut. The added pressure on soybean oil and other feedstocks could further weigh on U.S. margins. Whether the recent resilience in energy markets can offset that headwind will define the path into Q4.