Sustainability at Sea Meets Abundance on Land: WTO Pact, NOPA Crush, Diwali Buying, and U.S. LCFS Momentum

The WTO’s Global Fisheries Agreement came into force today, marking the organisation’s first sustainability-focused deal. The pact bans subsidies for illegal, unreported, and unregulated (IUU) fishing and deep-sea fleets, targeting part of the $35 billion in annual subsidies, including $22 billion that artificially boosted capacity. The immediate impact will be higher costs for fleets in China, the EU, U.S., South Korea, and Japan, as fuel subsidies are curtailed. This could dampen global fishing activity and modestly reduce marine fuel demand — though Singapore bunker sales still held near record highs at 4.97 million tons in August. Longer-term, the accord is expected to encourage more efficient fleets and reinforce environmental standards.

In oilseeds, the NOPA crush report showed U.S. soybean crush in August up 20% year-on-year, hitting a record. Soy oil stocks were also higher, with August marking the first month when inventories exceeded prior-year levels despite a slowdown in renewable diesel and biodiesel production. The explanation lies in exports, which remain a critical offset. Watch for change in Q4.

On the gasoil side, the market held steady, but backwardation on ICE gasoil Oct–Apr widened to +$50.75/mt. Meanwhile, BOGO eased slightly with the front at +445 and Dec at +482, maintaining a steep contango of $94/mt into July next year as September soyoil rolled into delivery.

Physical window trading was quiet but firm: FAME was marked at +673 over ICE gasoil for a flat price of $1,370/mt, while RME traded at +745 for $1,442/mt. UCOME remains the most expensive, holding a $116/mt premium over FAME. European biodiesel paper activity also showed strength last week with FAME volumes at 270 kt, RME at 230 kt, and UCOME lagging at 141 kt. The RME/F0 spread continues to lead the curve.

In Asia, India’s palm oil imports jumped 15.8% in August to 990,528 tons, the highest in more than a year, as refiners stocked up ahead of Diwali celebrations on October 21. Soyoil imports fell 25% while sunflower oil rose 29%. But with combined port and pipeline stocks now at 1.86 million tons — equal to 27–28 days of cover against normal monthly demand — refiners may slow buying sharply in November and December.

Back in the U.S., budget negotiations around a potential government shutdown are trending toward a new continuing resolution (CR). This has steadied compliance markets, with D4 RINs firming — December 2026 traded at $1.108 while December 2025 settled at $1.040 — lifting biodiesel screen crush margins slightly, now near –43 cents/gal. At the same time, California’s Low Carbon Fuel Standard (LCFS) continues to pull production capacity westward. A clear sign came last week when Phillips 66 applied for 51 separate LCFS pathways covering SAF, renewable diesel, and renewable naphtha at its Rodeo, CA facility. With renewable diesel and biodiesel already supplying more than 70% of California’s diesel consumption, refiners are being forced to export surplus fossil diesel at weaker margins, while regional policy incentives drive new investment into low-CI fuels.

D4 RINs

Altogether, today’s picture shows sustainability policy reshaping markets on multiple fronts — from fisheries to biodiesel, from marine fuel to edible oils. The interplay of WTO subsidy cuts at sea, record U.S. crush, India’s pre-Diwali stock build, and California’s LCFS momentum all underscore how policy and demand are colliding with abundant supply as the industry heads into Q4.

California Diesel Displacement