Category Archives: Feedstock

Kentucky Launches SAF Feedstock Risk Assessment Survey

The Center for Applied Energy Research at the University of Kentucky and the Kentucky Department of Energy and Environment have initiated a survey as part of the Biomass Feedstocks for Sustainable Aviation Fuels (SAF) Collaborative Project, funded by the U.S. Department of Energy’s National Energy Program. The survey will assess the risks associated with representative feedstocks available for SAF production in Kentucky.

CAER and EEC are requesting assistance in completing quantitative and qualitative questionnaires from all stakeholders that deal with these feedstocks. Stakeholders include producers, distributors, brokers, regulators, and entities that provide goods and services related to biomass feedstocks.

Used cooking oil (UCO) poses risk to Canadian canola

Biofuels produced from waste cooking oil imported from China threaten Canada’s domestic canola market, an industry executive says, according to a report in Canada’s Western Producer.

‘It’s a big deal,’ said Chris Vervaet, executive director of the Canadian Oilseed Processors Association. The association represents most of Canada’s crushers.

He says, ‘It could displace a lot of the demand that we need going into the very murky year of 2025 and beyond.’

Wewart called it a ‘very big risk’ for Canada’s canola industry, undermining what had been expected to be a huge market diversification opportunity for the crop.

For every one million tonnes of renewable fuel made from waste cooking oil (UCO) consumed in Canada, 2.5 million tonnes of canola is displaced, the report says.

Fastmarkets and Intercontinental Exchange launch UCO futures contract

Fastmarkets and Intercontinental Exchange (ICE) announced on 9 December the launch of the ICE Waste Cooking Oil (UCO) Gulf (Fastmarkets) futures contract to meet growing demand and address the complexities of the biofuel feedstock market.

The launch provides market participants with a new risk management solution in the renewable energy sector.

Fastmarkets says it is ideal for those who wish to understand UCO price movements without the need for physical delivery.

Fastmarkets said its assessment of UCO in the US Gulf of Mexico reflects the main market areas for UCO trade, capturing the broadest pool of data required for accurate market pricing.

This ensures convergence between futures and spot prices at contract expiry, further enhancing confidence in the operation of the market, Fastmarkets said.

STX Group Acquires Feedstock Trader to Expand Biofuels Business

STX Group announced on 3 December the acquisition of Marine Olie, a leading trader of waste-based advanced feedstocks.

STX Group said the strategic acquisition strengthens its position in the biofuels value chain and supports the company’s vision to become a leading global trader in the integrated feedstock-to-fuel-to-ticket market.

Marine Olie’s experience in fats and oils polymerisation, blending and optimisation in the Amsterdam-Rotterdam-Antwerp region, as well as its strategic infrastructure position, will be combined with STX Group’s broader environmental market footprint, regulatory expertise and access to capital.

Australia urges governments to urgently develop national biofuel feedstock strategies

The Australian Sugar Council (ASMC) recently called on governments to urgently develop a national biofuel feedstock strategy to boost the local biofuel industry and contribute to economic growth.

ASMC CEO Ash Salardini said ASMC has been advocating for this feedstock strategy since early 2024. He emphasised that sugar manufacturers could be at the heart of Australia’s future biofuels industry by producing bioethanol and other biofuel feedstocks. However, some of the current plans run counter to this goal, Salardini noted, ‘The currently proposed alcohol-to-fuel Sustainable Aviation Fuel (SAF) plant will not use any Australian feedstock, but will instead rely on bioethanol imports from places such as Brazil.’

The sugar industry has significant potential for biofuel development. Not only can sugarcane be processed into products such as bioethanol, but its by-product, bagasse, can also be converted into biofuels. The report states that by utilising these resources wisely, Australia’s sugar industry could meet approximately 8%** of the demand in the **domestic aviation fuel market. This fact highlights the need for a local feedstock supply chain.

ASMC has called on the government to establish a steering group of key feedstock suppliers to provide advice on feedstock supply and take steps to build a stable domestic supply chain.Salardini further stated, ‘We expect the Federal Government and the Queensland Government to really drive the implementation of this feedstock strategy, as they too want to see the Australian biofuels industry the economic uplift that the Australian biofuels industry will bring.’

The report also points out that only through a well-developed feedstock strategy and domestic supply chain will it be possible to reduce reliance on imported feedstocks, realise the full potential of Australia’s local resources, and drive the country’s biofuels industry into the long term.

Salardini concluded by emphasising that biofuels are at the heart of the energy transition, and that developing a national biofuels feedstock strategy will help Australia to capture a greater share of the international market in this area, while contributing to the green transformation and sustainable growth of the domestic economy.

Used cooking oil(UCO) market to reach $10.9 billion by 2032

The used cooking oil market is expected to be valued at over US$10.9 billion by 2032, says a report by Global Market Insights.

‘The market is expanding due to growing demand for sustainable solutions, with biodiesel production being one of the major applications. As an environmentally friendly energy source, biodiesel made from used cooking oil helps reduce waste and supports recycling. In addition to biodiesel, used cooking oil is increasingly being used in animal feed, cosmetics and various industrial applications,’ the report states.

The report states that the used cooking oil market will be valued at $2.7 billion in 2023 and is expected to grow at a CAGR of 5.9 per cent through 2032.

The report adds, ‘The used cooking oil market in China will be valued at USD 2.2 billion in 2023 and is expected to grow at a CAGR of 5.7 per cent by 2032.’

RFA discusses importing UCO feedstock with CARB

The Renewable Fuels Association this week responded to a request for information from the California Air Resources Board urging them to do more to ensure the integrity of imported waste cooking oil (UCO) and tallow in order to produce biomass-based diesel in accordance with the state’s Low Carbon Fuel Standard, according to a report on EnergyAgwired.com.

The RFA noted that according to CARB data on California’s fuel consumption, the use of biomass-based diesel (BBD) produced from UCO doubles and the use of BBD produced from tallow triples from 2019 to 2023, and that some in the marketplace believe there may be questions about the source and composition of these feedstocks.

Many biofuels market participants and other observers are concerned about the legality of importing ‘waste’ feedstocks and question whether some UCOs contain palm oil and/or other mislabelled fats, oils and greases,’ said Scott Richman, RFA’s chief economist.

Prohibition of the use of taxpayers’ money to subsidise the use of biofuels produced by imported UCOs

U.S. Senator Sherrod Brown (D-Ohio) has announced the introduction of a new bipartisan bill that would prohibit the use of taxpayer money to subsidise biofuels produced using imported foreign feedstocks, such as waste cooking oil from China and ethanol from Brazil.

The bill would also extend the 45Z Clean Fuel Production Credit. 45Z Clean Fuel Production Credits were passed as part of the Inflation Reduction Act to make the U.S. more energy independent and to stimulate the production of biofuels using U.S.-produced feedstocks – opening up new markets for U.S. farmers.

In July, Brown called on Treasury Secretary Janet Yellen and the Biden administration to limit eligibility for the 45Z tax credit to renewable biofuels produced from domestic feedstocks. Brown’s bill would ensure that eligibility for the tax credit is limited to biofuels produced from domestic feedstocks.

Brown’s legislation would also extend the credit for 10 years, providing the U.S. ethanol industry with the time and financial incentives to build the infrastructure needed to produce sustainable jet fuel.

USDA FAS report outlines the impact of China’s termination of its UCO export tax rebate

China’s ministry of finance and the state administration of taxation announced Nov. 15 that starting Dec. 1, the 13 percent export-tax rebate on used cooking oil (UCO) would be discontinued.

Leading biobased diesel producers in China have long advocated for this change, arguing that the tax rebate undermines the country’s interests by favoring UCO exports over domestic consumption.

It appears that this policy aims to facilitate the shift from export-oriented biobased diesel production to a domestic focus that could be used within China’s circular economy, reduce low-value feedstock exports, and promote higher-value SAF exports.

UCO prices adjust dramatically

The policy announcement triggered immediate changes in UCO prices.

On the procurement side, waste-oil prices dropped significantly.

In North China, export-quality brown grease, which averaged approximately USD$940 per metric ton on Nov. 15, fell 11 percent to around USD$843 per ton by Nov. 18.

Gutter-oil prices in East China also fell, declining by 6 percent to about USD$691 per ton.

Several processing plants have paused waste-oil collection, awaiting further market developments.

On the sales side, leading Chinese UCO producers set initial December and January contract prices at USD$1,000 to USD$1,050 a ton, representing an increase of USD$100 to USD$150 per ton over previous rates.

Industry sources noted that FOB China UCO offers were rescinded, with new offers priced at least USD$150 per ton higher.

This change poses challenges for UCO traders, who rely heavily on the rebate for profitability.

The estimated rebate loss for exporters ranges from USD$109 to USD$117 per ton.

Analysts anticipate significant price volatility in the coming months, leading to potential industry consolidation as smaller traders are acquired by larger firms.

Motivations behind policy shift

The primary objective of this policy appears to support the domestic biobased diesel industry by ensuring a more stable supply of UCO feedstock.

Exporting UCO has long been seen as low-value trade, exacerbating price competition among Chinese exporters on the international market.

Additionally, the policy seemingly seeks to ease fiscal pressures on the government amid an economic slowdown and address concerns of dumping accusations from trading partners.

There are also reports that Chinese authorities are investigating abuses within the rebate system, where importers allegedly mixed palm-oil acid with UCO to claim tax rebates fraudulently.

Opportunities for Chinese biobased diesel producers

Ending the UCO export-tax rebate signals a shift towards retaining more UCO within China, which may foreshadow the introduction of SAF mandates and other biofuel-supportive measures.

While nearly 40 countries have SAF mandates, China currently does not.

The policy change should lead to a lower and more stable domestic UCO supply, encouraging producers to expand capacity or increase utilization rates.

Cost savings from this policy could enable more significant domestic investments in research and development of related downstream industries, improving competitiveness.

Additionally, challenges exist in the UCO-collection infrastructure.

EU Transport & Environment and the International Council on Clean Transportation conducted studies that estimated UCO-collection rates ranging from 57 percent to 80 percent.

These studies revealed that collection levels surpassed Chinese UCO exports and biofuel use during the periods analyzed (years 2019 and 2023).

When applying these UCO-collection rates to the supply-potential estimates from the USDA’s Economic Research Service and Foreign Agricultural Service, the projected collection volume ranges from 8.7 to 12.2 billion pounds.

Therefore, the maximum potential for UCO collection and for further expansion of biobased diesel production capacity is enormous.

The government’s supportive measures for domestic biobased diesel, highlighted in the 2024 Biofuels Annual (CH2024-0100), include the recent SAF pilot launched Sept. 18 by the National Development and Reform Commission and the Civil Aviation Administration of China.

This initiative involves 12 flights by major airlines incorporating SAF.

Potential long-term impacts

In the near term, the policy will disrupt UCO exports, ensuring a larger supply remains within China.

This shift could reduce fiscal pressure and spur domestic biobased diesel growth, particularly enhancing SAF’s competitiveness on the global stage.

This could, however, provoke the EU to reconsider its current exclusion of Chinese SAF from antidumping measures.

In the long term, the policy is expected to curb speculative-trading practices involving palm-oil imports repackaged as UCO.

As a result, palm-oil imports are projected to decline, revealing China’s true UCO-supply capacity.

Some traders are already accelerating palm-oil sales.Over time, waste-collection operations may begin directly supplying feedstock to biobased diesel and SAF plants, bypassing intermediary traders.

The EU uses just 26% of its bio-waste potential, says the Bio-based Industry Coalition.

Under the Waste Framework Directive (WFD), the collection of biowaste will be mandatory in EU Member States from 1 January 2024 onwards. However, current biowaste collection in the EU-27 (plus Norway and the UK) is only 5,112,788 metric tonnes per year, which is 26% below the theoretical potential.

The vast majority of biowaste (garden and food waste) could be a valuable feedstock for bio-based industries and biomanufacturing, but is currently unutilised, which represents a missed opportunity. A focus on biowaste could alleviate Europe’s food waste problem and stimulate sustainable growth. This is particularly important as the EU prioritises strategic autonomy, competitiveness, circularity and green transition.

The Bio-based Industry Coalition (BIC) is Europe’s leading industry association, placing circularity, innovation and sustainability at the centre of Europe’s bioeconomy. Together with Zero Waste Europe (ZWE), the BIC has produced the second edition of a report identifying the untapped potential for valorisation of biowaste in Europe. Bio-waste Generation in the EU: Current Capture Levels and Future Potential is available today on the BIC website. The first edition of the report, four years ago, showed capture rates at 16 per cent of theoretical potential, while current data shows an improvement of less than 10 per cent.
The report includes country factsheets, provides examples of how the biobased industry is contributing to meeting this waste challenge, and cites best practices in waste management at the municipal level.