Biofuels ambitions rise along with crude oil volatility

As feedstock prices fall from all-time high, leading biofuel producers push for increased blending and production to cushion crude oil volatilities.
Crude oil prices, which declined sharply during the pandemic, started rising sharply as the world reopened and skyrocketed due to the Russia-
Ukraine war. Nations across globe are prioritizing energy security despite food prices remaining higher on year. Countries which scaled back
blending mandates related policy decision or withheld the pre-committed yearly revision of target on account of high food prices are now pressing
to move ahead on increased blending and production.

Biofuels blending mandates timeline Dated Brent

 Increase/implementaion  Delay/reduction 150
($/barrel)

120
2020 90
60
Jan — Indonesia rolls out B30 blending program 30
Dec — Argentina scaled back to 5% from 8% biodiesel blending 0
Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22
2021
Mar — Malaysia delayed B-20 biodiesel blending mandate in some
regions by at least six months
Market data
Jun — Brazil cuts biodiesel-diesel blend to 10% for May-Jun period. • Et apicturio explit vellupt
ianienis acea dolest eum nimi,
Spreads ($/mt)
Jul — Indonesia’s government delays B-40 biodiesel mandate to sincto tempore
2022 amid Covid‑19-related disruptions CBOT Soybean Oil Vs ICE Gasoil London MOC • si voluptatur aperunt minimodis
Bursa Malaysia Derivatives Crude Palm Oil Vs ICEnistecatus
Gasoil Singapore MOC ($/mt)
1200
Sep — Brazil’s approved reduction in the minimum biofuel content • vendam accupta tquodisciis
in diesel fuel to 10% for 2021 from 13% planned earlier doluptat.
800
Nov — US EPA proposes rule to further delay Renewable Fuel • Quidentore, odictem porionse
ra doluptas
Standard compliance dates for 2019, 2020 and 2021. 400
• ea quam, simus quate
Dec — Indonesia proposes to delay B40 roll out to 2025. veniminisque volupti
0
 US EPA proposes cuts to 2020 renewable volume obligation
-400
Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22
2022
Ethanol and biodiesel output 2018 2019 2020 2021 2022
Jan — Brazil maintains biodiesel mandate for rest of 2022 at 10%, (billion liters)
against planned mandate of 14% 60

Feb — Indonesia looking to increase biofuel blending mandate to 40

B40 from B30 in 2022
20
Apr — Finland slashed its biofuels mandate for 2022, 2023 to 12%
0
Jun — Indonesia to road test B40 biofuel blending US EU Argentina Indonesia US EU Brazil
mandates at end-July Biodiesel Ethanol
 Indonesia plans to raise palm oil share
in biodeisel to 35% from 30%
Brazil sugar vs ethanol US corn vs ethanol
 Argentina increases biofuel blending 2000
($/mt)
2000
($/mt)
mandate to 12.5% from 7.5%
 US EPA increases biofuel mandates for 2021 1500 1500
Ethanol NYH Cargo
at 18.84 billion gallons
1000 1000
 US EPA decreases biofuel mandates for 2022 Ethanol FOB Brazil Cargo
at 20.77 billion gallons 500 Brazil breakbulk
500 white sugar
US Corn CI
 “Fit for 55”: EU Council agrees on higher targets for 0 0
renewables and energy efficiency Sep-20 Sep-21 Sep-22 Sep-20 Sep-21 Sep-22

Jul — Indonesia to implement B35 biodiesel mandate from July 20 CPO vs biodiesel Asia Soybean oil vs biodiesel Argentina
($/mt) ($/mt)
Aug — Indonesia launces road test for B40 biodiesel blending 2000 2000
Soybean oil Argentina FOB Up River
Argentina biodiesel
1500
 Argentina extends increased biodiesel blending mandate 1500
for 60-days
1000 1000
Nov — Brazil to raise biodiesel mandate to B14 from Jan 2023,
B15 from March 2023 500
South East Asia Biodiesel
500
CPO FOB Indonesia
0 0
Sep-20 Sep-21 Sep-22 Mar-22 Mar-22 Mar-22

Source: S&P Global Commodity Insights, USDA, EIA, Energy Ministry of Argentina, EU Commission, Gapki, EPA
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