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Indonesia necessitates UCO, Pome oil export approvals

  • : Agriculture, Biofuels, Emissions
  • 25/01/08

Indonesian exporters of palm oil derivative products must now obtain approvals to ship them out of the country, according to a regulation released by the Indonesian ministry of trade today.

The palm oil derivative products include used cooking oil (UCO) and palm oil residue palm oil mill effluent (Pome) oil. The regulation is to ensure adequate availability of feedstocks to support the rollout of Indonesia's B40 mandate, under which companies will have to supply 40pc biodiesel blends from the end of February.

Export approvals will be valid for six months from the date of issuance, according to the regulation.

Further export policies will be discussed and agreed upon in an upcoming co-ordination meeting between relevant ministries and non-ministerial government institutions which market participants said is likely to be held on 13 or 14 January. The service for applying for export approvals will be temporarily suspended until the meeting is held. During the meeting, a quota system for exports might also be discussed, said Indonesia-based market participants.

An integrated team could also be formed to supervise exports, including bodies such as the Co-ordinating Ministry of Economic Affairs, Ministry of Trade, Industry, Agriculture, Finance and others.

Indonesia-origin UCO prices in flexibag have been on an uptrend since the end of October 2024, rising to over 1½-year highs of $960/t on 20 December, according to Argus' assessments. They were slightly higher at $965/t on 7 January and remained at that level on 8 January. Argus assessed Pome oil fob Indonesia at a 29-month high of $1,010/t on 9 December, although prices have since softened slightly to $960/t on 8 January.

Prices were driven up by escalating palm oil prices, and the country raising export levies on UCO and Pome oil to 6pc and 7.5pc of the monthly crude palm oil (CPO) reference price respectively in September last year.

More recently, UCO sellers were short on stocks, and rushed to aggregate volumes to fulfill export obligations.

Another round of export levy increases is looming, although market participants feel this might not be enough to fund B40 across all transport sectors as well. The country's ministry of energy and mineral resources said on 3 January that biodiesel producers and fuel retailers must supply 15.6mn kilolitres of biodiesel to fulfill the B40 mandate.


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25/02/04

Chinese UCO fate sealed long before tariffs

Chinese UCO fate sealed long before tariffs

New York, 4 February (Argus) — Broad US tariffs on Chinese imports that took effect today may reshuffle trade flows between the world's two largest economies, but demand for the once-pivotal US biofuel feedstock Chinese used cooking oil (UCO) was already waning. China exported 2.7bn lbs of UCO into the US over the first 11 months of 2024, more than any other foreign supplier, up from 1.6bn lbs in 2023 and just 100,000 lbs in 2022, according to US customs data. Clean fuel standards in states like California, Oregon, and Washington, along with a federal tax credit that rewards biofuels that produce fewer greenhouse gas emissions, spurred refiners to look beyond domestic supply and import low-carbon wastes from abroad. The US' new 10pc tariffs on Chinese imports could discourage further imports, since US refiners have a range of feedstock options for renewable diesel and sustainable aviation fuel (SAF) production. The US trade representative did not immediately confirm the tariff rate for UCO, but there was already an 8pc tariff on UCO from all origins and an additional 7.5pc tariff on China-origin UCO before even factoring in the new surcharge on all imports. Both countries have also recently taken steps to curb Chinese UCO exports, making further growth in UCO trade less likely, even if tariffs go away. China late last year cancelled a 13pc export tax rebate for UCO, reducing a key incentive to send the feedstock abroad at a time when the country is aiming to use more SAF domestically. The administration of former president Joe Biden then took steps to cut off US demand, closing off opportunities for fuels derived from foreign UCO from claiming a tax credit crucial for production margins. That incentive, known as "45Z," offers increasingly generous subsidies to fuels as they produce fewer emissions, which was initially expected to benefit refiners sourcing UCO over first-generation crop feedstocks. But the new government emissions model that road fuel producers must use to claim the credit for now offers no pathway for fuels derived from foreign UCO. The US Treasury Department justified the restriction by saying it had "significant concerns" about distinguishing imported UCO from palm oil, which is ineligible for 45Z. The guidance is only preliminary, meaning President Donald Trump will have the final say on how the government enforces rules around the credit. But the new administration is likelier to pursue even more sweeping restrictions on foreign feedstocks, which Republican lawmakers have argued are hurting demand for US crops that can also be refined into fuel. Republicans could use budget legislation this year to change the credit too, and key lawmakers on the House tax-writing committee have already floated potential restrictions on foreign feedstocks. There are some caveats to US biofuel markets that mean UCO imports will not entirely go away absent more muscular trade restrictions. US biofuel producers with foreign UCO on hand can still sell into state low-carbon fuel standard markets like California, which have not restricted the feedstock. And the current guidance around 45Z allows producers of SAF — but not road fuels — to use an alternative lifecycle emissions model known as CORSIA, which does not restrict any sources of UCO. Valero senior vice president Eric Fisher said last week on an earnings call that the current restrictions on road fuels derived from foreign UCO claiming 45Z would not affect Diamond Green Diesel, the refiner's joint renewable fuels venture with Darling Ingredients. Foreign UCO has "always" been directed to meet SAF demand in Europe and the UK, Fisher said, and the recent guidance "does not really change what we were going to do strategically with that feedstock." Europe and the UK have 2pc SAF mandates starting this year, though requirements do not become significantly more stringent until 2030. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tariffs not only US threat to Canada canola oil


25/02/04
25/02/04

Tariffs not only US threat to Canada canola oil

New York, 4 February (Argus) — Canadian canola farmers have reason to celebrate a last-minute deal to at least delay US tariffs. Changing US biofuel policies, however, could dim their excitement. The two countries agreed Monday to pause for a month 25pc tariffs on most Canadian imports, including agricultural products like canola oil. While best known for its use in food, canola oil has become an increasingly important ingredient in US biofuel production. Canada exported 800,000 lbs of crude canola oil to the US in 2021, before US regulators allowed more canola-based fuels to qualify for a biofuel mandate, but more than three times that total over just 11 months in 2024 according to customs data. Canola oil from all origins made up around 12pc of the US biomass-based diesel feedstock mix last year. The challenge for Canada is that policies in the US that helped cement canola oil's role in biofuel production are increasingly encouraging producers to use other feedstocks. The mere threat of tariffs could speed that trend along. A long-running US tax credit for blenders of biomass-based diesel expired last year and was replaced by the Inflation Reduction Act's "45Z" credit, which requires fuels to meet an initial carbon intensity threshold and then ups the subsidy as emissions fall. This shift was always expected to benefit waste feedstocks over crops, which incur a carbon penalty for land changes and fertilizer use. The clear message to refiners — both from the US government and from California regulators that run the state's influential low-carbon fuel standard — has been to diversify beyond vegetable oils. But an updated emissions model released by the Department of Energy last month surprised some in the industry by assessing the default carbon intensity of canola-based fuels as too high to automatically qualify for 45Z. Although fuels from soybean oil generally earn some credit, diesels made from canola oil could go from earning $1/USG last year to nothing this year. Before even factoring in potential tariffs, Canadian canola oil appears less attractive for refiners than even competing crops. Guidance on 45Z is preliminary , meaning canola crushers can push for final rules that are less restrictive. But energy lobbyists say privately that they do not expect the new administration to act with urgency to implement an incentive created by Democratic lawmakers and oriented around climate change. And many Republicans' concern with the credit is not that it is too harsh on canola — but that it is too permissive of foreign feedstocks they see as hurting US crop demand. The introduction of 45Z could simultaneously leave Canadian biofuel producers less able to backfill canola oil demand if US buyers look elsewhere. The credit can only be claimed by US producers, cutting off subsidies for imported fuels. At the same time, 45Z does not require fuel to be consumed stateside — meaning that US biorefineries can send subsidized fuel abroad to chase additional incentives Canada offers for biofuel usage. "The on-again off-again status of US tariffs and Canada's counter-tariff response do not alter the bare economics of biofuel production between jurisdictions when one has an exportable tax credit and the other does not," said Fred Ghatala, president of Advanced Biofuels Canada. The future of renewable diesel production in Canada, previously expected to grow significantly to the benefit of farmers, is in doubt. ExxonMobil's Canadian subsidiary is on track to open a 20,000 b/d renewable diesel plant this year, but other companies collectively representing more production capacity are wavering. Plans for an integrated canola crush and 15,000 b/d renewable diesel facility in Saskatchewan were paused last month. And it is unclear if Braya Renewable Fuels' 18,000 b/d biorefinery in Newfoundland is running now or if Tidewater Renewables' 3,000 b/d British Columbia plant will run after March. If demand from Canadian biorefineries remains limited, some traders expect that Trump's tariff threats could divert more canola oil previously bound for the US to Europe . But there is no perfect alternative to the US market, which accounted for 91pc of all Canadian canola oil exports in 2023 according to the US Department of Agriculture. "There is logistics capacity to sell canola oil, seed, or meal abroad. That's certainly an option," said Chris Vervaet, executive director of the Canadian Oilseed Processors Association. "The best option though is to continue to maintain and grow our trade relationship with our most important trade partner, which is the United States." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US soy crush falls behind export demand in December


25/02/03
25/02/03

US soy crush falls behind export demand in December

St Louis, 3 February (Argus) — Increased export demand for soybean meal and soybean oil pulled stocks below year ago levels in December despite record soybean crush over the month, according to US Department of Agriculture (USDA) data. US soybean crush reached a record-setting 5.92mn t in December, up by 6pc over the prior year. US soybean meal production gained 7pc over the prior year, reaching 4.38mnt, while crude soybean oil production gained 8pc to reach 1.17mn t. While soybean meal production increased by 7pc, December use gained 12pc over the prior year to reach 4.42mn t. US soybean meal use has, in part, been driven higher by increased export demand. Current USDA projections place US soybean meal exports at 15.79mn t for the 2024-25 marketing year, up by 8pc from the prior year. So far, export sales data indicates this level is likely to be reached, with 9.21mn t sold for export through 23 January of the marketing year, 11pc above the same interval of the 2023-24 marketing year. With soybean meal use exceeding production over the month of December, stock levels declined counter seasonally to 380,000t, dropping stock-to-use ratios two percentage points from year ago levels. Crude soybean oil use also gained over the prior year, up 13pc, to reach 1.14mn t. Both refining and non-refining uses for crude soybean oil remained above year ago levels over December. Refined soybean oil production increased 11pc from the prior year, reaching 870,000t. Non-refining use gained 19pc over the prior year to reach 250,000t. As with soybean meal, use has been driven higher over the 2024-25 marketing year by much higher export demand. Through 23 January, export sales of US soybean oil reached 672,000t, a nearly twenty-fold increase over the same period of the 2023-24 marketing year. As a result, crude soybean oil stock levels dipped 14pc from the prior year to their lowest level or record, down to 540,000t, pulling the stock-to-use ratio down 14 percentage points to 48pc. By Ryan Koory US soybean crush and products Dec Chg from Nov Chg from Prior year Soybeans ( mn t ) Soybeans crushed 5.92 0.21 0.37 Soybean meal ( mn t ) Produced 4.38 0.15 0.29 Use 4.42 0.34 0.51 Ending stocks 0.38 -0.04 -0.03 Stocks to use 8pc -2pcp -2pcp Crude soybean oil ( mn t ) Produced 1.17 0.04 0.09 Use 1.14 0.02 0.15 Refined 0.89 0.05 0.10 Non-refining 0.25 -0.03 0.05 Ending stocks 0.54 0.03 -0.07 Stocks to use 48pc 2pcp -14pcp Refined soybean oil ( mn t ) Produced 0.87 0.04 0.09 Use 0.86 0.05 0.10 Ending stocks 0.23 0.01 0.02 Stocks to use 26pc -1pcp -2pcp — USDA Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil's Mato Grosso soy harvest still lagging


25/01/31
25/01/31

Brazil's Mato Grosso soy harvest still lagging

Sao Paulo, 31 January (Argus) — The 2024-25 oilseed harvest in Brazil's central-western Mato Grosso state advanced this week but is still behind the previous season's pace, according to the state's agricultural institute Imea. Soybeans The state harvested around 12.2pc of its expected acreage area as of 31 January, up by 7.8 percentage points in the week. The pace is 27.2 percentage points below the same period last year for the previous crop and 13.1 percentage points behind the five-year average for the week. Corn The 2024-25 corn planting in Mato Grosso — which started on the week of 17 January — reached nearly 6.3pc of the expected acreage area as of 31 January, an advance of 5.1 percentage points on the week. The pace is 22.4 percentage points behind the previous crop in the same period and slower than the 22.2pc five-year average for the week, according to Imea. Cotton Planting of the 2024-25 cotton crop reached 53.5pc of the expected acreage area as of 31 January, up by 24.9 percentage points in the week. That trails last year's pace by 41.9 percentage points. The pace is also 18.9 percentage points behind the 72.4pc five-year average for the period. By Bruno Castro Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump tariffs create risks for US ag exports


25/01/31
25/01/31

Trump tariffs create risks for US ag exports

St Louis, 31 January (Argus) — New US tariffs on Chinese and Mexican imports could lead to disruptions in US corn and soybean sales to those countries, creating substantial risks for US agriculture markets. China and Mexico are the two largest purchasers of US produced corn and soybeans, collectively accounting for 48pc of US corn exports and 61pc of US soybean exports since 2019, according to US Department of Agriculture (USDA) data. With US president Donald Trump's plans of a 25pc tariff placed on US imports from Mexico, and a 10pc tariff place on imports from China to be enacted on 1 February, the future of those trade flows could by threatened by retaliatory tariffs. In 2018, during Trump's first term, similar tariffs placed on China resulted in counter-tariffs on US agricultural exports and a substantial reduction in trade. Over 2018, US exports of corn and soybeans to China dropped by 74pc from the prior year, according to USDA data. For the recently harvested 2024 US corn and soybean crops, some of this risk has been mitigated by higher-than-normal exports ahead of Trump's presidency. US exports of corn reached 20.9mn t through 23 January of the 2024-25 marketing year, 29pc ahead of last year's export pace. Similarly, US soybean exports reached 33mn t through 23 January, 21pc ahead of year ago levels. But there is still a substantial amount of the two crops that has yet to be shipped. As of 23 January, 2.4mn t of US soybeans purchased by China had yet to be exported to the country. Mexican buyers had 1.3mn t of US soybeans and an additional 7.9mn t of US corn yet to be exported. These purchases could be canceled as a result of tariffs, placing this supply back into the US market. The risks also extend to the volumes of the two crops yet to be sold for export. According to USDA projections, the US will export 62.2mn t of corn and 49.7mn t of soybeans over the 2024-25 marketing year. To reach these levels, the US will need to export an additional 22.4mn t of corn and 9.7mn t of soybeans. Historically, China and Mexico would be viewed as the primary purchasers of the volumes. By Ryan Koory Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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