This move appears dramatic, but BOGO (Bean Oil-Gasoil) is still up 54% in the last 3 months. Volatility in vegoil and certainly Gasoil makes trading biodiesel challenging. The FAME 0 barge market in Northwest Europe is still trading well above BOGO levels at +560/mt but probably not for long. In the US, D4 RINs, which track BOHO (Bean Oil-Heating Oil), reacted immediately and traded down almost one standard deviation to 0.65 c/gal. The world has plenty of vegoil, yet incremental crop-based vegoil is not required either in IRA in the US, CARB after 2026, and RED III. Doubts are emerging regarding Indonesia's ability to finance its mandate at current POGO values of +$427/mt as Indonesian exporters start feeling lower export demand with an export levy of $375/mt. This trend could be a major shift in demand pull by the biofuels industry in favor of alternative oils and feedstocks. When you combine this with the shifting use of oil imports by India (no growth and shifting use for 24/25) and China oilseeds (lower by 10%), it is difficult to see where that demand pull will come from unless the industry can lower the carbon intensity of crop vegoil dramatically. Only the BTC could save the day for fueling larger vegoil use when layered with 45z. The new administration will welcome lower RINs values that come with lower BOHO and probably facilitate a greater discount by allowing EV RINs in the new year not favoring higher usage.
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