Biofuels and feedstocks
Overview
As governments continue their attempts to lower emissions in line with international targets, demand for biofuels is increasing significantly. Global biofuels output is expected to rise by more than 3mn b/d in the next five years, and such rapid growth means that new threats and opportunities are constantly emerging. Staying on top of the ever-changing biofuels landscape is becoming more challenging.
The Argus biofuels solution provides in-depth pricing and market analysis across the entire global renewable fuel supply chain, from original feedstock to finished fuel – with prices and key insights into regional biodiesel, ethanol and feedstock markets, and more.
Latest biofuels news
Browse the latest market moving news on the global biofuels industry.
Malaysia's 2025 budget promotes palm waste SAF
Malaysia's 2025 budget promotes palm waste SAF
Singapore, 21 October (Argus) — Malaysia's state-owned Petronas will work with palm oil producers to develop palm oil waste-based sustainable aviation fuel (SAF), according to prime minister Anwar Ibrahim when he presented the 2025 budget. The palm oil producers include Malaysia-based agribusiness FGV and Malaysia-headquartered SD Guthrie, previously Sime Darby. Anwar also announced additional higher tax brackets for crude palm oil (CPO) exports will be introduced from 1 November and proposed to increase Malaysia's windfall profit levy threshold for the palm sector. These changes are meant to ensure domestic CPO supply and encourage domestic production of value-added products including SAF and biodiesel, according to the Budget documents. Progressive export duties will be introduced from 8.5pc when CPO prices rise above 3,600 ringgit/t ($837/t), up to a maximum 10pc for CPO prices above 4,050 ringgit/t. Previous duty rates capped out at 8pc for CPO prices above 3,450 ringgit/t. This revised export structure is likely to weigh on palm oil prices, as exporters may reduce bids in the domestic market to keep prices below the threshold that will trigger higher export duties. The CPO price threshold for triggering Malaysia's windfall profit levy will be increased to 3,150 ringgit/t for Peninsular Malaysia and 3,650 ringgit/t for Sabah and Sarawak from 1 January 2025, a rise of 150 ringgit/t from the previous threshold for both areas. The windfall profit levy applies to producers of palm fresh fruit bunches (FFB). The revised export taxes and windfall profit levy threshold are expected to increase costs for the palm plantation sector, but would help the downstream palm refining industry become more competitive compared with Indonesia, according to industry consultancy Glenauk Economics. Replanting funds Malaysia will also allocate another 100mn ringgit to incentivise smallholders to continue replanting unproductive, ageing oil palm trees under its 2025 budget, the same amount from the previous year. The funding will be 50pc in grants and 50pc in soft loans, as in Budget 2024. No land area target for replanting was specified this year. But this year's allocated funding of 100mn ringgit mirrored last year's allocation that targeted 5,900 hectares (ha) of land area. But this amount will likely not be enough to support adequate replanting, according to market participants. Malaysia replanted an estimated 1.7pc of mature oil palm plantation areas during January-September and 2.6pc of mature areas in 2023, according to data from Glenauk Economics. This indicates more funding is likely needed to meet the 4pc industry standard for replanting mature areas yearly as recommended to maintain palm oil output volumes. The low replanting rate has likely partly been because of high palm oil prices in recent years compared to the historical average. High prices discourage voluntary replanting as plantation owners prefer to continue harvesting FFB from older trees over replanting. Third-month crude palm oil (CPO) futures on Bursa Malaysia averaged 3,890 ringgit/t over the past two years up to 21 October. The average price recorded over the past 10 years was just 3,124 ringgit/t. The US department of agriculture (USDA) estimated a quarter of planted oil palm areas in Malaysia were older than 25 years old as of early January, resulting in lower yields. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Iowa renewable feedstocks terminal begins operations
Iowa renewable feedstocks terminal begins operations
Houston, 18 October (Argus) — Biofuels supply chain company Eco Energy has started operations at its renewable feedstocks terminal in Newton, Iowa, expanding domestic feedstock access for the renewable diesel market. The terminal will give Marathon Petroleum access to distillers corn oil, soybean oil, animal fat and used cooking oil (UCO) from Iowa for use in the company's renewable fuels segment, Eco Energy said on 15 October. The site east of Des Moines includes 1.2mn USG of feedstock storage, 32 tank car offload spots and access to primary railroads. Through a joint venture, Marathon and Neste are in the process of fully converting Marathon's Martinez, California, refinery to produce 48,000 b/d of renewable fuels, primarily renewable diesel, with full capacity expected by the end of this year. The agreement requires the companies to split feedstock supply requirements for the plant. By Payne Williams Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Jury rules against P66 in trade secret case
Jury rules against P66 in trade secret case
Calgary, 17 October (Argus) — A California jury says US independent refiner Phillips 66 must pay $604.9mn in damages for allegedly stealing trade secrets related to the state's biofuels market. The jury issued its verdict on 16 October, siding with west coast fuel retailer Propel Fuels more than two years after it filed suit in the Superior Court of California. Propel sought $1bn in damages , alleging that Phillips 66's renewables business in California was developed from trade secrets the refiner gained while conducting due diligence on for a possible acquisition of the fuel retailer in 2017 and 2018. Propel said it was "... actively building a new integrated renewable fuels business for Phillips 66 when Phillips 66 abruptly and without explanation terminated the deal on August 24, 2018." Shortly after terminating the deal, the refiner told California regulators it would begin selling E85 fuel in the state and launched retail sales of renewable diesel (RD) weeks later, Propel says. "Phillips 66 rapidly expanded its California renewables business using Propel's data and market insights," according to Propel. Phillips 66 denied any wrongdoing and said it is evaluating its legal options following the verdict. A final judgment in the case has not been entered and post-trial motions are pending before the court, Phillips 66 said. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
CSX forecasts softer 4Q rail demand
CSX forecasts softer 4Q rail demand
Washington, 17 October (Argus) — Eastern US railroad said it expects that fourth quarter commodity market conditions will be mixed, limiting some freight demand. "Going into the fourth quarter, near-term conditions look modestly more challenging," chief executive Joe Hinrichs said on Wednesday. But the railroad expects "modest volume growth", supported by a few segments including chemicals and agriculture. But lower locomotive fuel prices and the impact of international coking coal prices, which are linked to export rail contracts, could drive a decrease in total revenue during the fourth quarter. He estimated that impact at roughly $200mn compared with last year's fourth quarter revenue of $3.68bn. CSX expects to see a carryover of year-over-year momentum in chemicals, agriculture and food, forest products and minerals, while metals and automotive will continue to be challenged. Demand for metals shipments is predicted to soften through the end of the year. Interest in shipments, particularly steel, is soft because of "sluggish demand, ample supply and low commodity prices", chief commercial officer Kevin Boone said. A weaker-than-anticipated automotive market contributed to the drop in metals demand. Consumer demand for automotive products has been reduced by high retail prices and interest rates, which has led to increased dealer inventories and slower production, Boone said. But CSX expects that an "interest rate easing cycle will help these markets normalize," Boone said. Metals and equipment volume fell in the second quarter, primarily because of lower steel and scrap shipments. Shipments of metals and equipment fell by 9pc to about 64,000 carloads compared with the same three months in 2023. Revenue dropped to $208mn, down by 8pc from a year earlier. Automotive volume dropped in the second quarter because of lower North American vehicle production, CSX said. Automotive traffic fell to 301,000 railcars loaded, down by 2pc from the third quarter 2023. Automotive revenue dropped to $98mn, down by 3pc compared with a year earlier. The outlook for fertilizer shipments is mixed following the third quarter as a decline in long-haul phosphates shipments persisted. Volume was negative, but the railroad was able to haul some profitable spot shipments. Shipments of fertilizer fell to 45,000 carloads in the third quarter, down by 4pc from a year earlier. Fertilizer revenue dropped to $118mn, down by 5pc from a year earlier. CSX expects growth in some market segments. Chemicals freight demand is expected to continue growing following "consistent, broad strength across plastics, industrial chemicals, LPGs, and waste. That demand helped boost chemicals volume by 9pc compared with a year earlier. Chemicals revenue rose to $727mn in the second quarter, up by 13pc compared with a year earlier. Agricultural and food products shipping demand is expected to continue growing, led by demand for grain and feed ingredients from the Midwest for supplies. That follows a third quarter when higher ethanol shipments, as well as increased overall volume helped raise volume by 9pc from the third quarter of 2023. Revenue from shipping agricultural and food products rose to $416mn, up by 11pc from a year earlier. CSX expects intermodal growth to continue with the trucking market falling, which would help drive more container freight to rail. Intermodal shipments are goods shipped in containers and trailers between different modes of transportation. The 1-3 October strike by the International Longshoremen's Association (ILA) did impact intermodal traffic, but the railroad was pleased with the "relatively quick short-term solution", Boone said. International intermodal volume during the third quarter rose because of higher east-coast port traffic. Domestic volume was mostly flat. Overall intermodal volume during the quarter increased by 3pc compared with a year earlier. But lower revenue per container helped reduce total intermodal revenue by 2pc to $509mn. CSX does not expect a major shift in coal volume through the end of the year as coal markets seem relatively stable and utility stockpiles are sufficient, Boone said. Rising natural gas prices are also unlikely to stimulate a "near-term step-up in volumes". Export coal demand has been consistent lately, particularly from buyers in Asia. But revenue per railcar for export coal could make a modest single digit drop, as contracts are tied to international coal benchmarks and prices fell earlier this year. Expport coal voume rose to 11.1mn short tons (10.1mn metric tonnes) in the second quarter on higher demand for thermal and coking coal. But domestic coal deliveries fell to 10.2mn st, down by 12pc from a year earlier, on lower deliveries to power plants and lake and river terminals. Rail coal volume fell by 2pc from a year earlier, while revenue dropped by 7pc to 553mn st. Total CSX profits rose to $894mn, up by 8pc compared with third quarter 2023. Revenue increased to $3.6bn, up by 1pc. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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