When Fundamentals Break: Biodiesel Premiums, Carbon Tariffs, and a Disconnected Dollar
The biodiesel market continues to confound expectations. Spot premiums in the ARAG barge market have exploded, with FAME 0 trading at $1309/mt — over $700/mt above ICE gasoil. That’s a premium ratio of 1.15x to the underlying fossil benchmark, compared to just 0.46x at the same time last year. And it's not just the multiple that's startling: last year’s BOGO — the bean oil over gasoil spread — was at +256/mt, while this morning it's at +418/mt, nearly 7% lower week-on-week. Yet despite this year's stronger BOGO, today's spot premiums are nearly double. This divergence suggests a market driven by scarcity of trusted physical rather than any broad-based demand resurgence.
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