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Ucome paper trade reaches record high, physical grows

  • : Biofuels
  • 22/02/14

Open interest and traded volumes for cash-settled European Ucome biodiesel futures on the Intercontinental Exchange (ICE), priced against Argus fob ARA range Ucome spot assessments, hit a record volume in January, with the total suite of biofuel products listed by the exchange also reaching record-high traded volumes.

This trend coincided with a year on year rise in initiated physical spot trades for Ucome in the month on Argus Open Markets (AOM) amid rising blending mandates from European Union member states and incentives to utilise biodiesel made from waste feedstocks, which are eligible for double counting under EU RED II legislation.

The ICE-listed Ucome futures contracts recorded a total monthly trade volume of 3,380 lots in January, equivalent to 338,000t, up sharply from less than 100,000t in December and a new monthly record. Open interest for Ucome contracts hit 306,500t in January, ICE said.

With Ucome feedstock prices for UCO moving higher in the month, more market participants sought use of futures contracts as a hedge against possible price rises further out to the second and third quarters, with reported Ucome/Fame 0 spread trades rising, according to one broker.

More interest and trading activity has also come from investors and proprietary trading houses not usually associated with physical Ucome trade, another broker said.

Spot trading for physical Ucome in the month on AOM reached 46,000t, double the 23,000t initiated on the platform in the same month last year and up sharply from 20,000t in December. Traded volumes reached a record high of 74,000t in October.

Initiated deals for Ucome on AOM totalled 29,000t over 1-11 February, with 10,000t alone sold on 11 February with a rise in underlying gasoil futures, lifting outright prices on the day to $1,901.75/t, the highest since the middle of January and up from $1,442.56/t on 11 February last year.

The total suite of biofuels products on ICE, including Argus-related fob ARA range contracts for Fame 0, RME and Ucome, hit a monthly record high in January, with traded volumes growing three times since 2015, ICE said.

By Thomas Hughes

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26/04/08

US-Iran war sends FuelEU abatement price negative

US-Iran war sends FuelEU abatement price negative

London, 8 April (Argus) — The FuelEU used cooking oil methyl ester (Ucome)–marine gasoil (MGO) abatement ex-emissions trading system (ETS) price was negative on 7 April, underscoring how the US-Iran war has distorted marine fuel economics by driving fossil fuel prices sharply higher. The abatement price — which reflects the cost of meeting FuelEU requirements by using biodiesel instead of conventional MGO — fell below zero on 2 April for the first time since the assessment began at the start of 2025. It has remained negative since then, standing at -€23.46/t CO2 equivalent (CO2e) on 7 April. It follows a sharp rally in oil markets triggered by the conflict. The front-month Ice gasoil futures contract reached an all-time high of $1,569.75/t on 2 April, lifting MGO values and narrowing the cost gap between fossil fuels and biofuels. As a result, the typical "green premium" associated with biodiesel use was eroded. FuelEU Maritime regulations, which entered into force in 2025, require vessels operating in EU waters to cut greenhouse gas intensity by 2pc. The negative abatement price indicates that, at current values, using Ucome-based marine fuel is cheaper than using MGO on a compliance-adjusted basis. The shift follows an earlier distortion seen during the conflict, when B100 advanced fatty acid methyl ester (Fame) delivered into the Netherlands moved to a discount to MGO delivered into the Amsterdam-Rotterdam-Antwerp (ARA) hub once ETS costs were included. In parallel, traded FuelEU compliance surpluses for 2026 were reported at around €185/tCO2e on 8 April. This means it is currently cheaper to generate compliance using marine biodiesel blends than to buy surpluses to meet the FuelEU requirements. This is in stark contrast to last year, when shipowners largely opted to purchase overcompliance instead of using biodiesel — mainly due to cheaper compliance generated via manure-based bio-LNG . Despite these shifts, physical demand for marine biodiesel has yet to rise meaningfully. Market participants have reported limited increases in buying, but overall demand remains subdued even where biodiesel blends now offer a lower compliance-adjusted cost. This may be because of ongoing price volatility and uncertainty about the direction of the US-Iran war, which is keeping many shipowners focused on securing fossil fuel supplies for their vessels for the coming weeks. Another reason could be a lack of availability of marine biodiesel blends at smaller ports, and concerns from shipowners about engine compatibility for pure biodiesel. Demand for FuelEU compliance surpluses for 2026 has also softened, with plenty of offers but no bids. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Malaysian biodiesel group urges faster B20 rollout

26/04/07
26/04/07

Malaysian biodiesel group urges faster B20 rollout

Singapore, 7 April (Argus) — The Malaysian Biodiesel Association (MBA) has urged the government to speed up the nationwide rollout of biodiesel-fossil diesel blends of up to 20pc (B20) to strengthen energy security, it said today. The MBA called for immediate implementation of higher blending levels between B10 and B20 in areas where infrastructure can support it. It acknowledged that progress towards higher blends has been limited by infrastructure readiness but sought further government support to enable a nationwide B30 blend. To encourage biodiesel use outside the national blending programme, the MBA also asked the government to exempt a 10pc sales tax on biodiesel. The national biodiesel programme, combined with voluntary biodiesel use, would enhance energy security, cut greenhouse gas emissions, generate foreign exchange savings, reduce exposure to global oil price shocks and improve fiscal resilience while supporting domestic palm oil and rural livelihoods, the MBA said. Malaysia launched the B20 biodiesel programme for the transport sector in February 2020, but implementation has been limited to Langkawi, Kedah, Labuan and Sarawak. B7 remains the applied blend in the industrial sector without a nationwide rollout, the MBA said. Neighbouring countries have also announced or are considering higher biodiesel blending levels because of energy security concerns due to the war in the Middle East. Indonesia last week announced it will implement a B50 blending mandate from 1 July while Thailand adjusted the biodiesel content from B5 to B7 in March and has announced restrictions on crude palm oil exports from 7 April . By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Oiltek Malaysia, Brunei's BioSeaga to build SAF plant

26/04/07
26/04/07

Oiltek Malaysia, Brunei's BioSeaga to build SAF plant

Singapore, 7 April (Argus) — The Malaysian subsidiary of Singapore-based Oiltek International, which provides technology solutions in the vegoils industry, and Brunei-based food security and renewables project developer BioSeaga Industries signed a heads of agreement on 6 April to build a sustainable aviation fuel (SAF) plant in Sabah, Malaysia. The plant has a planned capacity of approximately 300 t/d according to a Singapore Exchange (SGX) filing. It is expected to cost around $350mn, but the final contract value will be recomputed and mutually agreed upon by the companies before they enter into a definitive agreement. The final value will be based on prevailing costs, finalised engineering designs and agreed scope of supply. Oiltek and BioSeaga aim to enter a definitive agreement by 6 October, depending on whether project financing, regulatory approvals, land right confirmation and other items have been secured. After that, Oiltek Malaysia will be the plant's exclusive contractor and undertake engineering, procurement, design, construction and commissioning (EPCC) services for its pre-treatment facilities, tank farm, logistic bulking infrastructure, and partial blending facilities. The term of the heads of agreement will be one year unless terminated earlier by the companies, extended by mutual written agreement, or superseded by a definitive agreement, whichever happens first. Oiltek is involved in several other early-stage Malaysian SAF projects. It is providing pretreatment unit technology for Malaysian engineering firm SK SAF's plant which plans to reach final investment decision by 2027-28. Last September, Oiltek also signed an agreement with state-owned Sarawak Economic Development (SEDC), biofuel feedstock supplier Apeiron Bioenergy, and fellow technology provider Sulzer to build a 15,000 t/yr SAF pilot plant in Sarawak. But Oiltek said in a separate filing with SGX on 6 April that it has not entered into a definitive agreement with Indonesia's state-owned Pertamina's subsidiary, PT Kilang Pertamina Internasional, to develop a pre-treatment unit in Indonesia and supply its feedstock. It added that the heads of agreement signed between the two companies in February 2025 had expired. By Sarah Giam Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Brazil climate plan cites risks to grid, fuels

26/04/02
26/04/02

Brazil climate plan cites risks to grid, fuels

Sao Paulo, 2 April (Argus) — Brazil's long-delayed climate plan issued in March highlighted how extreme weather stemming from climate change could hurt its power grid and biofuels production, setting it back in achieving climate targets. The plan is Brazil's first comprehensive roadmap for meeting its nationally determined contribution (NDC) under the Paris agreement, with a goal of reducing greenhouse gas emissions by 59-67pc by 2035, from 2005 levels. Reaction to the plan from environmentalists was mixed. Amazon environmental research institute IPAM hailed the plan as a "reflection of Brazil commitment to mitigating climate change" and to "positioning the country as a global supplier of low-carbon products". But Brazilian climate think tank Observatorio do Clima called the plan unambitious and argued that it "caters to agribusiness". It also criticized the plan for failing to mention the phase out of fossil fuels. The plan underscores rising risks to the power sector owing to climate change, focusing on the impact that extreme weather is already having on generation, distribution and transmission. These threats include increased frequency and duration of droughts, more extreme rainfall, catastrophic wind events and more numerous heat waves. Drought is a top risk in the plan, owing to Brazil's continued dependence on hydroelectricity for its power supply. Even with the expansion of solar and wind generation, hydroelectricity met over 62pc of Brazil's power demand in 2025, according to the electricity sector clearinghouse CCEE. A recent study from the mines and energy ministry demonstrated that average water levels for hydroelectric reservoirs have declined sharply in the past decade: The 10-year moving average from 2023-2012 was 68pc, while the average from 2013–2022 fell to just 41pc of maximum capacity. The proposal seeks to expand and modernize existing hydroelectric plants to improve energy efficiency and increase installed capacity, with the goal of expanding installed capacity by 6.3GW by 2025. The plan also calls on the government to update electricity regulations to expand the use of energy storage batteries and pumped hydro plants. Reinforcing the grid The plan also foresees growing risks to the power transmission sector, which has suffered an increased number of outages because of extreme weather events, including flooding, high winds and fires. Record flooding in Rio Grande do Sul state in 2024, which resulted in extended power outages for more than 1mn people, forced the government to reassess its power transmission expansion plans for the state to increase resilience of infrastructure. The plan warned that transmission infrastructure is not designed to withstand extreme weather events and that poor engineering projects, combined with limited preventive maintenance, has increased the vulnerability of the grid. The plan includes the addition of more than 30,000km (18,640 miles) of transmission lines by 2035 and suggested that the new infrastructure be assessed to minimize the risk of weather. The plan also calls on the government to include new technologies for grid stabilization, such as reactive power support to control voltage, secondary frequency control to balance supply and demand, and self-restoration mechanisms that help restore power quickly after power outages. The plan also examines potential risks for the supply of biofuels, which play a central role in the decarbonization of Brazil's transport sector under the NDC. The plan calls for mandatory ethanol and biodiesel blends of 30pc and 20pc respectively in 2030, rising to 35pc and 25pc by 2035. To guarantee adequate supply, the plan calls on the government to promote research for the biofuels sector, focusing on the development and improvement of new crop varieties and diversification of feedstocks to produce biofuels. This includes crops that can grow in different regions and that are more resilient to climate change. It also calls on the government to promote irrigation in areas prone to drought, in an effort to limit its impact on production of sugarcane and other biofuel feedstock crops. Brazilian power generation by source % Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

ARA crop-based Fame cheaper than diesel for first time

26/04/02
26/04/02

ARA crop-based Fame cheaper than diesel for first time

London, 2 April (Argus) — European crop-based biodiesel benchmarks traded below underlying gasoil prices for the first time as the US-Israel war on Iran and resulting supply disruptions in the Middle East have pushed conventional diesel values to multi-year highs. Fame 0 trade was initiated on price discovery platform Argus Open Markets at a discount of $25-78/t to Ice gasoil, for loading between 9 and 30 April. Rapeseed OME traded at discounts between $5-35/t in the same period. But it is difficult to increase purchases of crop-based Fame in the largest European markets because biodiesel blending for road fuel is restricted at 7pc of diesel under the EU's fuel quality directive. And biodiesel is one of the cheaper options for meeting increasingly higher biofuel mandates, and so many buyers already blend biodiesel at the maximum rate possible. There are a few options for where biodiesel demand could crop up. Companies can agree to use B100, or pure biodiesel. This is limited by the size of the compatible vehicle fleet. Some countries may not be hitting the 7pc blend wall, including non-EU European countries without biofuel mandates. These could voluntarily increase biodiesel blending — something also recently suggested by the European commission as a supply protection measure. Countries outside of Europe could also start using biodiesel, although logistics and transport costs could erode much of the discount. Biodiesel is often blended at higher rates in warmer climates. Biodiesel could go into industrial or power generation, although these sectors are typically less familiar with liquid biofuels than the transport sector. Higher blends can also be used in marine bunker fuel, possibly the easiest pivot given the growing role of bio-bunkers following the expansion of the EU ETS to shipping and the implementation of FuelEU maritime. However, crop-based biodiesel is less appealing in the maritime sector, because it does not qualify for FuelEU maritime compliance — FuelEU requires that biofuels be made from wastes or residues. But crop biodiesel can still be zero-rated in the EU ETS. When including ETS costs, waste-based biodiesel has been cheaper than marine gasoil for several weeks already, but buying has not significantly increased . Some say shipowners and buyers are hesitant to make significant changes to their procurement strategy based on an acute price spread, or are wary of using biodiesel in their engines. By Simone Burgin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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