Greenergy Halts Plant, Asia Discounts Gasoil, Market Holds Breath

It was a subdued day in the biodiesel and renewable diesel markets, with little change in the BOGO spread, holding steady at +478. The relative calm in ICE gasoil and soft oils is reflected in narrow trading ranges, though we observed a modest uptick in soft oil prices in Europe. Soybean oil gained a €10/mt premium over rapeseed oil for July, with RSO priced at €1,075/mt FOB Rotterdam. The market appears to be eyeing the July rapeseed crop, tempering demand and the premium structure on RME.

In the ARAG barge window, volumes were limited. RME traded at $695/mt over ICE gasoil while FAME held at $680/mt. UCOME saw two trades only in the $790/mt range, maintaining its dominant role. The flat price for UCOME is assessed at $1,401/mt, maintaining a strong $110/mt premium over FAME0 and reinforcing continued market preference for higher GHG-saving fuels. Interestingly, the RME/FAME premium sits at only $15/mt, emphasizing how little additional value is being placed on lower-carbon intensity unless the feedstock basis is waste.

A major development came from the UK, where Greenergy announced the temporary shutdown of one of its biofuel plants. The reason: prolonged weak margins and persistent uncertainty in the biodiesel sector. This decision signals growing stress in the European production landscape, especially for players reliant on conventional FAME margins. With gross replacement margins near $70/mt in ARAG, many producers may soon face similar pressure. The pause could also tighten physical availability in Northwest Europe in the weeks ahead, particularly if demand picks up post-summer.

Meanwhile in Asia, Chinese refiners, including GS Caltex and FPCC, are undercutting regional markets with deep gasoil and jet fuel discounts—up to $1.30/barrel below MOPS. These aggressive tactics appear to be working, with regional buyers responding positively. This could eventually force a rebalancing in global refined product trade flows and indirectly weigh on biodiesel competitiveness in export-linked regions. Gasoil chart still looks terrible.

Across the Atlantic, D4 RINs traded up to 1.107 today, hinting at cautious optimism that Congressional negotiations on biofuel-related legislation may be making headway. That said, the overall financial room in Congress remains narrow, and any legislative progress will have to overcome competing fiscal priorities and mounting resistance from sectors exposed to RIN liability. Without a clear breakthrough, upward pressure on RINs could continue, potentially supporting blending economics but further squeezing obligated parties.

In short: the market is quiet, but not calm. Underneath the surface, shifting trade flows, shutdown signals, and aggressive pricing tactics in Asia—and fragile policy maneuvering in Washington—point to volatility ahead.