European biofuel feedstock market at a standstill with activity expected to resume in 2025

Trading for biofuel feedstocks has been unusually slow in recent months, with sources referring to fourth-quarter animal fats demand as “non-existent” and expecting activity to resume in early 2025.

“The storage is full, biofuels producers show zero interest, as there are plenty of tickets available at lower prices, and production margins have been unsupportive lately,” a source said.

The reason for higher ticket availability is a recent change in Dutch legislation, Fastmarkets understands, where the Dutch Emission Authority cut the Renewable Energy Units (HBE) carryover cap to 10% for 2025, from the current record-high 25%.

This change led to many in the industry hurrying to sell excessive certificates, flooding the market.

Besides biofuels producers, other animal fats-consuming industries have also shown less buying interest, with oleochemical market buyers holding back from buying fats despite expensive prices for crude palm oil (CPO) and other vegetable oils.

‘Room for price negotiation’

Recent CPO trades to Europe were reported at $1,067.50 per tonne CIF Rotterdam for September shipment and $1,075 per tonne CIF for October.

Pet food producers also stayed away from actively booking volumes for the fourth quarter, expecting a further price drop.

“There is quite some room to negotiate with the suppliers, and they seem to accept,” a source told Fastmarkets.

“Pet food does not consume volumes as big as the energy sector does; additionally, sooner or later, they will reduce their premiums for high quality fats as the market softens further,” a trader said.

While the European market remains quiet, local animal fats traders are exploring export destinations including the US, with only traders showing local buying interest for fats – who later ship the goods to the US.

Sources expect trading to recover in the first quarter of next year, with increased blending mandates boosting biofuel production and feedstock consumption, as well as anti-dumping duties against Chinese biodiesel contributing to European production demand.

Fastmarkets’ latest animal fats price assessments published on August 22 included 15% mixed fat at €850 ($946) per tonne DDP Northwest Europe, 5% bone fat at €945-965 per tonne DDP and 2% poultry fat at €1,000-1,020 per tonne DDP.

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