Biofuels and feedstocks
Overview
Demand for biofuels is increasing significantly, driven by the need to decarbonise road transport as part of the energy transition. 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 challenges and opportunities are constantly emerging. Keeping on top of the ever-changing biofuels landscape requires accurate pricing, insightful analysis and access to the latest data.
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.
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Q&A: EU ethanol seeks bigger role in RED revision
Q&A: EU ethanol seeks bigger role in RED revision
Brussels, 14 October (Argus) — The EU should preserve renewable energy targets for road transport and give European-produced ethanol a greater role in cutting transport emissions and import dependency when revising its renewable energy directive (RED), according to Laurent Donceel, the new secretary general of European renewable ethanol association ePURE. Is ethanol use increasing for European producers? Ethanol and biodiesel remain the leading renewable transport fuels in the EU, representing between 6-7pc of all road transport fuel consumed. More than 80pc of that volume is produced in Europe. The broader debate about energy security and "made in Europe" has put wind back in our sails. Is this thinking being picked up in the forthcoming revision of the renewables directive? We are somewhat concerned that the European Commission will oversimplify the framework and remove the specific renewable energy target for road transport. That target has existed since the first RED was adopted in 2009. It has been a key driver of investment and has provided the business case for Europe's bioethanol and biorefining industry. If those targets disappear, an important question arises: will Europe's roughly 50 biorefineries continue investing in renewable fuels? The EU-US trade agreement made no commitments on market access for US ethanol. Why such a surge in imports? Agriculture and ethanol were considered a strategic industry under the EU-US deal. That is very different from the UK's approach, which granted duty-free access to US ethanol and effectively undermined its domestic industry. The US is the largest exporter of ethanol to Europe, and the sector there benefits from a red carpet of tax credits and production incentives. Compare that with Europe, where producers get red tape and increasing regulatory constraints for both conventional and advanced biofuels, including restrictions in sectors such as aviation and maritime. This creates a clear distortion in global competitiveness. The commission just last month decided to prolong until 2029 its surveillance of fuel ethanol imports into the EU acknowledging the potential for a surge that could threaten the European ethanol industry. Do you see trade distortion? Clearly, there has been a major surge in imports. Trade distortions have occurred in the past. Last year, the commission decided to halt duty-free ethanol imports from certain developing countries, including Pakistan, under the bloc's Generalised System of Preferences (GSP) framework. We also have concerns regarding imports from Mercosur countries, notably Brazil. But those volumes remain quite limited compared with imports from the US. Is the EU prepared to go against the US? Aren't other trade and geopolitical issues more important in the grand scheme of things? Ultimately, that is a decision for EU member states and the European Parliament. But Europe is currently experiencing its third energy crisis in five years. For the last crisis, Europe shifted heavily towards LNG imports. That didn't take us very far with the strait of Hormuz blocked. Recent geopolitical events such as the closure of the strait have once again demonstrated Europe's vulnerability. Do we really want to swap one dependency for another or do we want to strengthen domestic supply chains? Do you see Europe rethinking limitations on eligible biofuel feedstocks, notably food and feed crops? Recent discussions are encouraging. One of the RED delegated acts, proposed by the commission but rejected in the EU parliament in July, acknowledged that indirect land-use change (ILUC) is not an issue for European ethanol production. Globally, there are 10 countries identified as having a high ILUC risk. None of them are in Europe. That provides a solid basis for future RED to incentivise home-grown fuels, including both conventional and advanced biofuels. We are also seeing discussions about harmonising the current 7pc cap on food and feed-crop-based biofuels. For many member states, that could represent an increase compared with existing national limits. We also have good hopes that future discussions about RED in hard-to-electrify sectors will align on feedstocks, enabling ethanol-based biofuels to contribute to the energy transition of maritime and aviation. Could changes to RED or shipping fuel mandates boost the use of biofuels? Absolutely. Currently under certain EU laws, first-generation ethanol, like other biofuels, is given a grade equivalent to fossil fuels. As a result there is little incentive to use it because it does not contribute towards compliance targets. As for Sustainable Aviation Fuels (SAFs), the definition excludes crop-based biofuels. We need to reconsider how you pivot hard-to-electrify sectors. Upcoming legislative proposals affecting maritime and aviation are now expected in 2028. Those new proposals should recognise renewable ethanol's potential to cut import dependency and greenhouse gas emissions. Could revisions to the bloc's 2035 phase-out of the internal combustion engine (ICE) also allow for continued use of biofuels in new vehicles? The commission's original proposal to amend the CO2 standards for cars gave no continued role to first and second-generation biofuels. Since then, voices in the EU parliament have increasingly argued that biofuels should play a more significant role in the future framework. Even with increasing demand for electric vehicles (EVs), by 2035 around 50pc of the cars on European roads will not be fully electrified. Our position is straightforward: Instead of lowering the climate ambition, broaden feedstock eligibility so that we can achieve the same level of ambition using more European-produced renewable fuels. by Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
German HVO100 demand surges on price advantage: Sources
German HVO100 demand surges on price advantage: Sources
London, 12 October (Argus) — Traders expect German HVO100 demand to roughly double this year compared with 2025, mainly because it is being traded nationwide at a discount to B7 diesel for truck loading, prompting consumers to increasingly switch to the cheaper fuel. HVO100 is 100pc pure hydrotreated vegetable oil, a synthetic paraffinic diesel that can be used as a direct replacement for conventional fossil diesel without requiring engine modifications. B7 is a diesel blend with a maximum biodiesel content of 7pc, and typically cheaper than HVO100. But German average inland B7 diesel prices rose by as much as 48pc after 27 February following the outbreak of the Iran war. HVO has been less affected by this development because the fuel is not produced from crude oil and driven by different pricing mechanisms. As a result, since mid-August, HVO100 has for the first time been traded nationwide at a discount to B7 diesel. This wholesale price advantage of HVO100 over B7 diesel is now increasingly being passed on to consumers. While HVO100 had long been sold at German filling stations at premiums of more than €0.20/l compared with fossil diesel, market participants now report a much smaller gap. Premiums have fallen to around €0.04-0.08/l in many locations, while at some sites HVO100 is already being sold at a lower price than conventional diesel. With fuel prices generally remaining high, consumers have become more price-sensitive and are increasingly opting for the cheaper renewable diesel alternative, with traders reporting that consumers have shown significantly stronger interest in HVO100 this year than last. Customers from the agricultural sector and commercial fleet operators in particular have increased their purchasing volumes. One trader in southern Germany reported that HVO100 sales volumes during the first nine months of 2026 had already clearly exceeded the total volume sold in the whole of 2025. Other market participants also describe trading activity as considerably more dynamic and expect overall market activity in 2026 to double compared with 2025. Argus Analytics estimates that German HVO consumption will increase to around 2.41mn t this year from around 1.01mn t in 2025. The vast majority of HVO volumes are blended into conventional fossil diesel, while market participants estimate that HVO100 accounts for around 25pc of the overall market. HVO demand in Germany has been boosted by the abolition of the double-counting mechanism for advanced biofuels in the country. Previously, advanced biofuels produced from waste and residue feedstocks could be counted twice towards Germany's greenhouse gas (GHG) reduction quota. With double-counting removed, higher physical biofuel volumes are required this year to meet quotas, increasing demand for drop-in fuels such as HVO. The trend has been supported by historically high revenues from the trading of GHG quota compliance. Companies generate the compliance by placing eligible renewable fuels that deliver greenhouse gas reductions compared with fossil fuels on the market. These GHG revenues can be used to lower wholesale HVO prices and improve the product's competitiveness. Revenues generated from the marketing of advanced HVO reached record highs in recent weeks and remain elevated. These higher GHG revenues are largely the result of persistently low water levels on the Rhine. A significant share of Germany's biofuel supply is transported from the Amsterdam-Rotterdam-Antwerp (ARA) hub into Germany, meaning that low river levels have restricted domestic biofuel availability . As a result, physical compliance with the GHG quota has become more difficult, forcing obligated parties to rely increasingly on purchasing GHG reductions instead. This increase in demand has pushed up the value of GHG reductions and, despite reduced product availability, improved the economics of marketing HVO. By Marcel Pott and Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Voluntary biodiesel use furthers Brazil climate goals
Voluntary biodiesel use furthers Brazil climate goals
Sao Paulo, 9 October (Argus) — Voluntary use of biodiesel in Brazil above its 15pc mandate is broadening across sectors, highlighting diverse approaches to decarbonization and energy security amid intensifying global conflicts. The pending implementation of a regulated carbon market in Brazil means companies will need to reduce or offset greenhouse gas emissions. To meet those obligations, many are expanding their use of biofuels alongside the purchase of carbon credits. Biofuel use could also gain ground as an alternative to petroleum-based diesel, especially during price spikes driven by geopolitical conflicts such as the Mideast Gulf conflict and the Russian war in Ukraine, market participants from biofuel companies and industries say. Biodiesel is typically more expensive than diesel in Brazil, but that relationship can flip during periods of global tension. Between 2 March, the first trading day after the start of the US-Iran war, and 6 October, the price of S10 diesel at the southern port of Paranagua, in Parana state, reached R7,402($1,480)/m³, the highest level since the 2020 start of Argus' historical series. Biodiesel in the same period was quoted at R5,434/m³ in the spot market in Araucaria, also in Parana. Companies have also begun to pay greater attention to energy security in light of recurring international crises and supply risks. Brazil imports between 20-25pc of its diesel demand, leaving it exposed to foreign market conditions. In this context, biofuels are gaining importance not only as a decarbonization tool but also as an alternative to reduce reliance on imported fuels and bolster energy security. This concern has been reinforced by recent events highlighting the vulnerability of global supply chains. Russia, one of the world's leading diesel exporters and historically a major supplier to Brazil, went so far as to restrict overseas shipments to safeguard its domestic market during the war in Ukraine. In the US, statements by President Donald Trump regarding potential limits on fuel exports have also fueled fears of a tightening in global supply. "Companies need to analyze the magnitude of the risk associated with not having the product [diesel]" in hand, said Daniel Furlan Amaral, regulatory affairs director at the Brazilian vegetable oil industry association Abiove. "This will become a component of companies' risk matrices." Industries from mining to consumer goods test higher blends Brazilian mining giant Vale is among the firms testing higher biodiesel blends. In Mariana, in southeast Minas Gerais state, the company uses 30–50pc biodiesel blends in part of its truck fleet, which has a capacity of up to 190 tonnes (t). Vale sees biodiesel use, once performance parameters are validated, as having the potential to generate meaningful environmental gains and serve as a benchmark for large-scale adoption across the sector. The miner is also investing in solutions such as ethanol and battery-electric trucks. A Brazilian-based subsidiary of German auto giant Mercedes-Benz is also testing diesel with a 30pc biodiesel blend in its vehicles. According to the automaker, the trials assess component durability and equipment performance under long-term operating conditions. Besides Mercedes-Benz, state-controlled Petrobras is running tests with 20–25pc blends to evaluate the potential for emissions reductions, while rail operator Rumo uses a 16pc blend in part of its rail fleet. There are also cases of pure biodiesel use in specific applications. Mercedes-Benz reported positive results with the fuel during the Rota Sustentavel COP30 initiative, carried out in partnership with Brazilian biofuel producer Be8. In the initiative, a truck traveled about 4,000km between Passo Fundo, in the southern state of Rio Grande do Sul, and Belem, in the northern state of Para, cutting greenhouse gas emissions by about 99pc, according to researchers from the Instituto Maua de Tecnologia. Among other firms evaluating biodiesel use are consumer goods giant Unilever, which uses pure biodiesel in boilers; maritime logistics firm Wilson Sons Servicos Maritimos, in waterborne operations; and power plant Energetica Suape II, in thermoelectric generation engines. Be8 and other biodiesel producers, such as Amaggi, Potencial, Binatural and Oleoplan, are also conducting evaluations with blends above the mandatory level. Regulatory shift eases voluntary blending Hydrocarbons regulator ANP is revising the rules for voluntary biodiesel use above the mandatory 15pc blend. Previously, companies needed prior authorization from the agency. With a provisional procedure now in effect, companies only need to notify the agency of their use. The regulator has been aligning its rules with Brazil's Fuel of the Future law to streamline procedures and provide legal certainty for the adoption of these alternatives. Replacing prior authorization with a notification model had long been sought by the industry, according to Abiove. According to Amaral, the process required approvals from different agencies — including the Brazilian environment and renewable natural resources institute Ibama — and could take more than six months to complete. "All these requirements discouraged interest" in the past, Amaral said. By Natalia Dalle Cort Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Brazil’s inflation quickens to 4.58pc in September
Brazil’s inflation quickens to 4.58pc in September
Sao Paulo, 9 October (Argus) — Brazil's inflation accelerated to an annual 4.58pc in September, on broad-based gains led by higher transport, food and beverage costs. The consumer price index IPCA accelerated from 4.22pc in August, national statistics agency IBGE said on Friday. The latest move puts inflation slightly above the central bank's target range of 1.50-4.5pc. Food and beverage costs increased to an annual 4.66pc in September, up from 3.53pc in August. Transport costs increased to an annual 3.94pc in September from 3pc in August. Vehicle fuel inflation rose to 4.97pc from 4.41pc, as global fuel costs surged on the Mideast Gulf war. Housing inflation decelerated to an annual 4.22pc from 4.9pc a month earlier, pushed down in part by the end of the Itapu bonus, which launched in July and reduces electricity bills for residential and rural consumers. Personal expenses slowed to 5.9pc from 6.16pc. Brazil's central bank expects inflation to end 2026 at 5pc, above its 1.5-4.5pc targeted range. Brazil's economic growth has accelerated to an annual 2pc in the second quarter from 1.8pc in the prior three quarter after dropping from a recent high of 4.1pc in the third quarter of 2024. Meanwhile, Brazil's central bank lowered its target rate to 13.75pc in late September. By Mariana Funchal Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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