Palm breaks by 3%, yet gasoil recovers by 2% as technical traders eye the POGO chart gap of +150-200. Caution advised. Meanwhile, in the EU energy council last Friday, UFOP asked for POME (palm oil effluent) classification requirements under annex IX to be reviewed in light of larger imports into the EU. This matter, added to the China rebate, has sent a chill on annex IX under REDII; notwithstanding, the UDB (Union Database) implementation debacle. Germany has not been deterred and has essentially told obligated parties that 2024 excess credits could not be rolled into 2025 and that the same would have to wait until after 2026. Similar uncertainties taint the US RFS as 45z IRS guidance on which model to use to calculate under the GREET model remains outstanding, sending D4 RINs south to 68 c/gallons and LCFS average pricing for last week dropped to $65.50/mt. Lobbyists are in full force on the hill in Washington DC to work out the renewal of the BTC, but congressional work stops at the end of this week for Thanksgiving recess and does not return until Dec 3. Gasoil backwardation (Dec/Apr) in the meantime has spiked by 56.25% today and 163% in the last 3 months to +$12.50. Prompt barge trade in winter Biodiesel (RME) was correspondingly active but at a much lower premium, with RME trading at +688 over ICE Gasoil at $1374/mt flat for a narrower gross replacement margin of $128/mt. Heat screen crack also moved higher to $25/barrel, supporting US refineries' export to the EU.
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