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European cost-of-production assessments for sustainable aviation fuel (SAF) rose in the week to Friday May 15, supported by higher feedstock and hydrogen costs, while stronger renewable diesel prices also boosted overall production economics.
The numbers behind that rise tell a more detailed story. Fastmarkets’ daily assessment for used cooking oil (UCO), ISCC-certified, delivered Northwest Europe reached €1,117 ($1,306) per tonne on Thursday May 14, up by €19 per tonne on May 8.
UCO – processed via the hydroprocessed esters and fatty acids (HEFA) pathway – continues to represent one of the largest cost components within SAF production economics, and its price direction sets the tone for the whole complex.
That same week, spot indications for SAF fob ARA were heard around $2,960–3,040 per tonne, leaving the spread between SAF spot levels and HVO (UCO) relatively narrow. Market participants continued to monitor the relationship between HVO and SAF pricing closely, with HVO (UCO) remaining a key reference point within Fastmarkets’ SAF cost-of-production calculations as both markets compete for the same waste-based feedstocks.
The picture across the broader feedstock complex was mixed. European biofuel-feedstock spreads showed divergent movements in the week ending Thursday May 14, with the largest changes driven by stronger rapeseed oil prices, weaker crude palm oil values and a moderate recovery in gasoil futures.
The rapeseed oil-gasoil (ROGO) spread recorded one of the largest increases during the week, widening by $13.19 per tonne to $285.29 per tonne. The move was driven mainly by stronger rapeseed oil prices, with the US dollar value of the Rapeoil FOB DM Rotterdam assessment increasing by $23.44 per tonne to $1,431.29 per tonne, while the front-month futures price for ultra low sulphur diesel, fob ARA rose by a smaller $10.25 per tonne to $1,146 per tonne.
In contrast, the palm oil-gasoil (POGO) spread saw the largest decline among the gasoil-linked spreads, narrowing by $35.25 per tonne to $204 per tonne. The decrease was mainly caused by weaker crude palm oil prices, with the daily crude palm oil, cif Rotterdam assessment falling by $25 per tonne to $1,350 per tonne, while gasoil prices moved slightly higher during the week.
At the animal fats end of the market, Fastmarkets’ weekly poultry fat, 8% ffa, delivered Northwest Europe assessment remained stable at €990 per tonne, while the daily soybean oil assessment increased by €10 per tonne to €1,170 per tonne, widening the spread between the two by €10 per tonne week on week to €180 per tonne.
Away from the fuel complex, a related tightening was visible in European processed animal proteins (PAPs) – a market that competes for overlapping raw material streams.
The PAP market was firmer during the week ending Friday May 15, supported by continued demand from the aqua feed and pet food sectors, while lower fishmeal availability from South America also continued to support interest in local animal protein alternatives.
Market participants reported steady buying interest for poultry meal during the week, particularly from aqua feed producers, with pet food demand also remaining active. Price ideas for poultry meal with a minimum of 65% protein content were heard at €655–680 ($766–795) per tonne in Europe, while offers were reported around €700 per tonne.
Fastmarkets assessed its weekly category 3 poultry meal, 65% protein, exw Eastern Europe price at €665 per tonne on Friday, up by €10 per tonne week on week.
CHART
Beyond the weekly price movements, one deal reported during the week pointed to the direction of travel for SAF supply chains more broadly. DHL Express signed a long-term SAF offtake agreement with Dubai-based developer SAF One, securing supply from what is expected to become the first dedicated SAF production facility in the Middle East.
The deal is a marker of how SAF infrastructure is expanding geographically as mandated blending volumes increase and European producers face continued pressure on feedstock availability. Most currently available SAF is produced through the HEFA pathway using waste-based feedstocks such as UCO, animal fats and other lipid-based materials. Growing SAF mandates in Europe and other regions are increasing competition for these feedstocks, leading many producers and governments to explore alternative pathways, including alcohol-to-jet, synthetic eSAF and municipal waste-based production routes.
Meanwhile, SAF certificates (SAFc) were stable during the week, with indications remaining at around 80–90 pence per certificate, although market participants continued to report very low liquidity.
Taken together, the three markets covered above – SAF production economics, biofuel feedstock spreads, and European animal proteins – reflect the same underlying dynamic: a finite pool of waste-based materials facing demand from multiple sectors simultaneously.
UCO prices are rising, putting upward pressure on SAF costs. Rapeseed oil is firming, widening the ROGO spread. Palm oil is weakening, narrowing POGO. Poultry fat is stable while soybean oil moves above it, widening that spread. And in the protein market, poultry meal is firming as South American fishmeal availability tightens, pushing aqua feed and pet food buyers toward European alternatives.
Each of these moves has a distinct immediate cause. But the direction – tighter, firmer – is consistent across all of them.