Boston, MA, January 24, 2019
Easing trade tensions and a larger call on biomass-based diesel from RFS will contribute to more bullish U.S. biodiesel fundamentals in 2019, according to ESAI Energy’s newly published Global Biofuels Outlook. These bullish fundamentals will encourage higher biodiesel prices in 2019.
In the report, ESAI Energy concludes that additional soybean exports to China and a temporary freeze on small refinery waivers under RFS will be bullish for U.S. biodiesel markets in 2019. Biodiesel production was already nearly 300 million gallons higher in 2018 than each of the previous two years after tariffs reduced imports. Fewer small refinery waivers will create a larger call on biomass-based diesel to balance RIN markets in 2019 and will encourage additional production. At the same time, additional soybean exports will create more demand for key biodiesel feedstocks. It will be bullish for both feedstock and biodiesel prices in 2019.
“Additional soybean exports will exacerbate a larger call on biomass-based diesel in 2019,” explains Chris Barber, Head of Refining and Biofuels Analysis. “Tariffs are expected to hinder imports, so U.S. biodiesel producers will have to continue producing at high rates in 2019 to meet RFS requirements.”
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