European HVO prices uncoupled from diesel

Spanish Market: Biofuels
06/03/26

European hydrotreated vegetable oil (HVO) outright prices have remained relatively stable throughout the week despite the ongoing US-Iran conflict driving fossil fuel prices to multi-year highs.

The premium for HVO compared with gasoil — which represents the additional cost of replacing one tonne of diesel to one tonne of HVO — has fallen sharply as gasoil has risen, meaning that HVO is relatively more competitive with fossil fuel since the war began (see chart).

The lower premiums for HVO could theoretically support additional buying from those looking to comply with biofuel mandates while it is most cost-effective and takes some pressure off strained oil supply chains. But overall HVO buying has been slower throughout the first quarter because of ongoing uncertainty about unfinalised German legislation and generally poor diesel demand, resulting in a contango into the second quarter when participants expect more clarity and the beginning of the summer driving season.

The landscape could also be muddied by the interplay between HVO and sustainable aviation fuel (SAF), which are produced by the same plants. Unlike HVO, SAF prices have risen significantly since the start of the week, and there are concerns about the possibility of China restricting exports for biofuels at some point as was done with oil products to secure domestic supply. If SAF prices continue to rise, European producers could switch production, limiting HVO availability — although stock levels are currently strong and would take time to deplete.

By Simone Burgin and Evelina Lungu

HVO premiums decreasing while gasoil rises $/t

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09/03/26

Biodiesel premiums sink but EU cap curbs demand

London, 9 March (Argus) — Heavy gains in Ice gasoil futures have pushed biodiesel premiums to their lowest levels in two years, but the EU's strict blending cap means demand is unlikely to rise despite biodiesel's improved competitiveness. Premiums for Fame 0 and used cooking oil methyl ester (Ucome) to Ice gasoil fell to fresh two-year lows on 5 March and have held near those levels since. The rapeseed-based biodiesel grade RME edged slightly higher on 6 March but remains at more than a one-year low. The escalation of the US-Israeli war with Iran has driven gasoil values sharply higher, with markets touching fresh multi-year highs on Monday. Major shipowners halted transits through the strait of Hormuz after fighting broke out, tightening supply. Around a fifth of EU and UK diesel imports — roughly 200,000 b/d — flowed through the strait last year. The surge in gasoil prices makes biodiesel appear comparatively cheap, but European buyers cannot increase usage because the EU Fuel Quality Directive caps conventional methyl ester blending at 7pc of the diesel pool. The cap effectively freezes road fuel biodiesel demand, even though high gasoil prices and the prospect of lower-cost compliance with biofuel mandates would otherwise incentivise greater uptake. Demand could rise outside Europe if biodiesel prices were to fall below diesel equivalents, although the EU typically remains a net import market. The scale of the gasoil rally — and the broader market shock caused by the war — has prompted calls in other regions to relax blending limits. Brazil's Parliamentary Front for Biodiesel is stepping up lobbying to raise the national blend to 16pc (B16) from 15pc (B15), arguing that US-Iran tensions will raise global refined product prices. Outside the road sector, marine biodiesel remains uncapped. Strong gains in marine gasoil (MGO) have pushed pure biodiesel (B100) into a more competitive position, with Argus -assessed B100 Advanced Fame dob Netherlands now at a discount to MGO dob ARA once Emissions Trading System (ETS) costs are factored in. Shipowners may look to cover some of their volumes with B100 where logistics allow. But for now, demand has not surged. Many buyers are delaying non-essential refuelling because of extreme crude and gasoil price volatility — even though the B100–MGO discount has widened beyond $150/t and MGO prices have risen to their highest levels since 2023. By Christian Hotten Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US sorghum turns to ethanol as exports slows

05/03/26

US sorghum turns to ethanol as exports slows

St Louis, 5 March (Argus) — Slowing global trade activity, and growing biofuels opportunities have pushed US sorghum growers to pivot towards ethanol as a future driver of demand. Slowing international trade, with some partners "on the sideline" this year combined with a large harvest has created "piles" across the sorghum belt, said John Duff, with the US National Sorghum Producers (NSP) said during the Commodity Classic in San Antonio, Texas, last week. China was the largest purchaser of US sorghum, importing nearly 60pc of US sorghum production from 2020 through 2024, according to US Department of Agriculture (USDA) data. Another 5pc of US sorghum production has historically been shipped to African countries, often supported by food aid programs like US Agency for International Development (USAID). These export opportunities took a hit in 2025 following the US-China trade dispute , and the cancellation of USAID by US president Donald Trump. During 2025, combined sorghum exports to China and Africa fell 88pc from the previous year, pulling US sorghum exports to their lowest level in over a decade. At the same time, the US sorghum harvest reached 11.1mn metric tonnes (t) in 2025 – its highest level in 9 years — boosting US stocks to 6.8mn t as of 1 December 2025, up 26pc from the previous year, according to USDA data. This supply glut occurred along with growing demand from US ethanol producers for sorghum , which saw usage increase 273pc to 3.1mn t in 2025 on the year, according to US Energy Information Administration (EIA) data. To continue increasing sorghum's role in the US fuel ethanol sector, the NSP is looking to US biofuels policy for support. The future looks domestic Ethanol producers have only opportunistically used sorghum as a feedstock in the past due to technological and logistic limitations. Sorghum inclusion rates have been historically limited by the need for finer screens compared with corn for grinding the grain, and the inclusion of protease enzymes for fermentation. But these practices are now widely adopted across the ethanol industry, with some producers storing the grain in the same bins alongside corn, Duff said. But sorghum historically "isn't in the right place at the right time" due to a narrow harvest window and lack of on-farm storage. The Renewable Fuels Association (RFA) lists 17 facilities in its directory that can use sorghum as a feedstock for ethanol, with a combined production capacity of 1.34bn USG/yr. Ethanol yields from sorghum are typically lower on a per bushel (bu) basis than corn by 0.1-0.2 USG/bu, said Tad Hepner, vice president for strategy and innovation at the RFA. Typically, one bushel of corn produces 2.9 USG of ethanol, meaning current ethanol plants could consume as much as 12.6mn t/yr of sorghum. Full utilization by these plants would still be a fraction of the more than 130mn t of corn that ethanol production consumes annually. And the location of these plants reflects the crop's limitations. Last year, Texas, Kansas and South Dakota accounted for more than 80pc of both US sorghum acres and ethanol plants capable of using the crop. But last year did see sorghum displace a significant amount of corn. In 2025, US fuel ethanol production increased by 6.41mn bl from the prior year, according EIA data. At the same time, ethanol producers reduced corn use by 2.1mn t and increased sorghum use by 2.27mn t, according to EIA data. Overcoming the logistics hurdle could prove a win-win for US ethanol and sorghum markets, particularly as biofuel polices appear set to align with the crop. Over 80pc of US sorghum production occurs in states which use agricultural production practices including reduced or no tillage, and split nitrogen application by necessity, Duff said. These practices can make the crop eligible for the 45Z clean fuels tax credit scheme. Data is king A major limitation in expanding sorghum's appeal to ethanol producers is the collection and verification of production data. Because the practices that make sorghum eligible for 45Z credits were adopted as a necessity years ago, farmers often do not track and report them, making it difficult to claim the credits' value, Duff said. But the NSP is working to address this issues through a $70mn USDA Advancing Markets for Producers grant focused on improving farmer data collection. This, along with the USDA's recently announced One Farm, One File initiative could reduce this barrier. US sorghum producers are also looking to other markets as pathways towards expanding ethanol's interest in the feedstock. The NPS is working to present a case to the US Environmental Protection Agency that would make the ethanol produced from sorghum eligible for the advanced biofuel D5 RIN credit under the Renewable Fuels Standard, Duff said, which would enhance the crop's appeal to ethanol producers. By Ryan Koory Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Hong Kong conducts first green methanol bunkering

05/03/26

Hong Kong conducts first green methanol bunkering

Shanghai, 5 March (Argus) — Hong Kong completed its first green methanol bunkering today, supplying 500t of biomethanol and 1,000t of fossil methanol to China Merchants' CM Hong Kong . Sinopec Hong Kong, China Merchants RoRo and Sinobunker jointly carried out the operation. Sinopec Hong Kong conducted the bunkering using a 7,500dwt methanol dual-fuel barge , Daqing 268 , chartered from Sinobunker. The barge was delivered in early January and completed its first 200t bunkering at Shenzhen port later in the month. CIMC Enric supplied the 500t International Sustainability and Carbon Certification (ISCC) EU-certified biomethanol from its 50,000 t/yr biomethanol plant in Zhanjiang, Guangdong province, with greenhouse gas reduction of over 80pc against a 94g CO2/MJ comparator. CM Hong Kong is China Merchants' first 9,300 twenty-foot equivalent unit (TEU) methanol dual-fuel roll-on/roll-off (RoRo) ship. It refuelled with 300t of biomethanol at China's Tianjin port in September 2025, with materials from Towngas' 50,000 t/yr plant in Ordos, Inner Mongolia. Hong Kong has scheduled for another 200t biomethanol bunkering on 10 March for Cosco's 20,000 TEU methanol dual-fuel containership Cosco Gemini , also using Sinobunker's methanol barge. Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

No tankers crossed Hormuz on 3 March: JMIC

04/03/26

No tankers crossed Hormuz on 3 March: JMIC

New York, 4 March (Argus) — There was no tanker traffic through the strait of Hormuz on 3 March, the fourth day of fighting between the US, Israel and Iran, due to threats of attacks from Iran and satellite jamming, according to global maritime security partnership Joint Maritime Information Center (JMIC). That total on Tuesday compares to 50 tankers on 28 February, the first day of fighting, and three tankers each on 1 and 2 March, according to the JMIC in a notice shared by the United Kingdom Maritime Trade Operations. Cargo ship traffic dropped to only a single vessel on 3 March from 98 on 28 February, 18 on 1 March and seven on 2 March. The historical daily average for all vessels through the strait is about 138 ships, JMIC said. The notice, which was published by JMIC at about 12:27pm ET on 4 March, included four vessels in a list of confirmed vessel incidents from the "approximately past 24 hours". The containership Safeen Prestige was the only vessel with damage the JMIC did not describe as "minimal" and the only vessel that was located within the strait of Hormuz at the time of its incident. The Gold Oak dry bulker, anchored near Fujairah, sustained minimal damage. The tanker Libra Trade r also sustained minimal damage 10 nautical miles off the coast of UAE. "US and Israeli-affiliated or flagged vessels are advised to minimize time spent pier-side or at anchor within high-risk zones to reduce vulnerability of targeting," JMIC said. "Maintaining movement and avoiding predictable patterns remains critical for mitigating the risk of targeting strikes or collateral damage." Vessel tracking data and navigational tools within the region will likely become increasingly unreliable in the days to come with significant Global Navigation Satellite System jamming underway throughout the strait of Hormuz, Gulf of Oman and the Arabian Gulf, according to JMIC. "Observed impacts include positional offsets, Automatic Identification System anomalies and intermittent signal degradation," JMIC said. By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Dutch B100 flips to discount against MGO

04/03/26

Dutch B100 flips to discount against MGO

London, 4 March (Argus) — B100 advanced fatty acid methyl ester (Fame) dob Netherlands has this week flipped to a discount to marine gasoil (MGO) dob ARA when accounting for EU emissions trading system (ETS) costs. The discount means that it is now cheaper to sail on B100 than MGO, marking a sharp turn in fundamentals for the marine biodiesel product. With FuelEU Maritime requirements also in place, requiring a 2pc reduction in greenhouse gas (GHG) emissions this year, shipowners may look to bunker some of those needed volumes if logistically viable. Most participants reported higher interest for the product and an increase in enquiries, but demand has not spiked yet. This could be because buyers are generally holding off unnecessary bunker fuel purchases, awaiting more stable prices. Price volatility in underlying crude and gasoil markets has capped bunker fuel trade and purchasing has been limited to buyers seeking urgent refuelling or booking volumes for the second half of March in the past two days. The typical differential of around $10-20/t between Rotterdam and Antwerp very-low sulphur fuel oil (VLSFO) and MGO that has emerged since January to reflect RED III requirements in the Netherlands also disappeared on 3 March, with the sudden price surge diluting those premiums and suppliers holding on to limited volumes likely to have more control over offer levels. The spread turned negative for the first time since the B100 price launched on 22 January, and marks the first time a B100 Argus assessment was at an ETS-inclusive discount to MGO since November 2024. The spread was at a discount of $73.16/t on 2 March, before widening to $150.72/t on 3 March. B100 Advanced Fame dob Netherlands was assessed at $1,075/t on 3 March, down by $45/t from a week prior — tracking declines in the wholesale Advanced Fame fob market. Unmet offers were sharply lower on the Argus Open Markets (AOM) session on 2 March, counterbalancing a sharp increase in gasoil futures — the front-month Ice gasoil futures contract 16:30 GMT marker rose by $122.50/t on 3 March, having posted $133.75/t gains in the previous session, reaching its highest since 2022. MGO dob ARA, on the other hand, stood at $927/t on 3 March, up by $243/t since the end of last week, and its highest since 2023. MGO prices in Rotterdam and Antwerp have spiked since the start of this week, reflecting the surge in Brent crude and gasoil prices following the outbreak of the US-Iran war . Rotterdam MGO was pegged at $957.50/t dob on 3 March, up by $242.25/t in from 27 February, while Antwerp MGO was at $967.50/t dob, up by $254.50/t over the same period. By Hussein Al-Khalisy and Siew Hua Seah Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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