From Washington to Buenos Aires: Policy Shocks Rock Biofuels: EPA punts RVOs into 2026, Argentina’s peso peg drives tax relief, and BOGO/BOPO spreads sink to multi-year lows

EPA confirmed in a court filing that the reallocation debate over small refinery exemptions will prevent any final RVOs from being issued before 2026. Even if the agency targets “winter 2025–2026,” litigation timelines make April or May 2026 the earliest realistic date. In the meantime, 45Z guidance remains absent, but producers are still pushing gallons into LCFS states where credit values offer support but add RINs to the market.

The RINs market tumbled in response. Dec25 D4s fell to $0.987, and Dec26 slipped to $1.05, with the curve pointing to sub-$1 soon. A bumper U.S. soy crop — nearly 10% already harvested — is also adding heavy pressure, suggesting credits will stay depressed well into 2026.

D4 RINs

Argentina, meanwhile, suspended all export taxes on grains, soymeal, soyoil, and biodiesel through October 31, with markets watching closely for any extension. The move comes as the peso remains pegged to the U.S. dollar and the government resists a float, leaving exporters struggling to bring in hard currency. By contrast, its larger neighbor Brazil floats its currency — arguably the better path unless Argentina were to dollarize entirely, though either choice would be fraught with difficulty. China quickly booked close to 1 million tonnes of Argentine soybeans in the last 48 hours, continuing to bypass U.S. origin, while Brazil has started planting another record soybean crop now forecast near 178 million tonnes. The biggest trade impact is in biodiesel: cheaper Argentine FOB values could reopen SME arbitrage into Europe, even with MIP still in place.

Energy markets remain volatile. Sanctions chatter around Russia adds uncertainty, while China has signaled it will dump product into Asia. ICE gasoil pushed almost 1.5% higher, back above $700/mt — up $70/mt from the August low. Backwardation widened sharply, with Oct/Dec up 7% to +$27.75/mt, more than half the Apr26 backwardation at +$54.75/mt. As I have said before, the Russia/Ukraine war uncertainties have added at least $100/mt to gasoil.

In Europe, RME flat price pushed higher to $1,458/mt while rapeseed oil weakened, lifting gross margins to around $160/mt on replacement costs near €1,100/mt. The UCOME/RME spread held at +$28/mt, largely because of RME strength. Paper activity calmed after Friday’s shock from Argentina’s tax policy, but physical margins remain firmly in RME’s favor. BOGO continues to collapse, down to +$388/mt, while BOPO has narrowed to just +$31/mt. The charts show both spreads plunging back toward multi-year lows, highlighting just how weak blending economics are even with volatile feedstock costs.

BOGO

One exception has been SAF. Over the past 40 days, outright HEFA-SPK fob ARA values jumped from around $2,000/t at the end of July to above $2,700/t by mid-September, a gain of roughly $700/t or +35%. The rally stems from successive SAF/HVO closures in Northwest Europe, the latest announced by BP. Yet this is a thinly traded market, prone to manipulation and outsized swings on small volumes. The knee-jerk spike is likely to attract Asian imports, putting a ceiling on further gains just as the market faces more policy and trade turbulence.