Biofuel Market Intelligence · Updated April 4, 2026
Biofuel Market Analysis
Comprehensive analysis of UCO, Tallow, Biofuel, SAF global and Asian
market trends with corn and soybean oil commodity markets. Last Updated: April 4, 2026
UCO: Q1 2026 Asia UCO prices firm at FOB Straits $1,060-1,095/MT. EU ReFuelEU non-compliance penalties now enforced (Germany: SAF €4,700/MT, e-SAF €17,000/MT), driving European SAF feedstock demand surge. Malaysia MPOB launched UCO reference price + pursuing UCO futures market. Chinese UCO exports to Singapore tripled in Q4 (84,024t); 2025 YTD 180,122t already exceeding full-year 2024 (173,340t). US market blocked (125% tariff + 45Z USMCA).
Tallow: US domestic prices at historic highs. US RD industry restructuring (Monroe Energy/Chevron co-processing halted; Vertex/Jaxon plants closed) reducing some demand, but structural biofuel demand provides floor. Brazil tallow collapsed post-50% tariff; Australia pivoting to Asia.
SBO: Treasury 45Z proposed rule (2/3) confirmed ILUC removal + EPA RFS Set 2 finalized (3/27) with record volumes: total 26.81B gal (2026), 27.02B gal (2027); BBD 9.07/9.20B gal. SRE 70% reallocation included. eRINs excluded. Effective 6/15. CBOT SBO at 54-60¢/lb, up 20%+.
Corn: Crude oil rally + RFS finalized (ethanol 15B gal/yr maintained) supporting grains. Corn at $5.50/bu on export strength + ending stocks drawdown. 2026/27 planting acreage and E15 permanent authorization are next directional drivers.
Section 2 · Biofuel Products
Biofuel Product Markets
Biodiesel (FAME), Renewable Diesel (HVO), SAF, and Ethanol market trends.
Biodiesel & Renewable DieselBiofuel
Product
Global Output
Key Trends
Biodiesel (FAME)
~45M MT/yr
EU largest market; Indonesia B40
Renewable Diesel (HVO)
~15M MT/yr
US/EU rapid growth; refinery conversions
Bioethanol
~110M kL/yr
US/Brazil dual market; E15 debate
Biomethane
Rapid growth
Europe waste-based expansion
SAF (Sustainable Aviation Fuel)SAF
Item
Figure
Notes
Global SAF (2025)
~1.9M MT/yr
+90% YoY (1MT → 1.9MT)
2026 Forecast
~2.4M MT/yr
Growth decelerating (IATA warning)
Price vs. Jet Fuel
2-5x
Up to 5x in mandated markets
Key Feedstocks
UCO 81%, Tallow 17%
HEFA absolutely dominant
Asia Blending MandatesAsia
Country
Current Policy
Target
Indonesia
B40 in effect
B45/B50 uncertain (2026 quota flat at B40)
Malaysia
B10 nationwide/B20 select
B20 nationwide push; B30 by 2030
India
E20 push
B5-B7 expansion
Korea
RFS strengthening
SAF mandate (2027)
Japan
SAF legislated
10% SAF by 2030
Singapore
SAF 1% mandate (2026), Hub role
Neste 1M+ MT/yr; SAF 3-5% by 2030
Thailand
SAF 1% mandate (2026)
Systematic UCO collection; ISCC growth
Ethanol Market UpdateEthanol
RFS Finalized: EPA RFS Set 2 final rule (3/27) — ethanol 15B gal/yr maintained for 2026-27. eRINs (electric pathways) excluded, strengthening ethanol competitive position
Production Recovery: Q1 2026 US ethanol output rebounding from seasonal lows. Crude oil rally improving ethanol margins
45Z Credit Expansion: OBBBA (signed 7/4/25) extends 45Z through 2029; SAF credit cut $1.75 → $1.00/gal; traditional biofuel credits expanded
E15 Policy: Year-round E15 permanent authorization under consideration. Could add 500-800M bu corn demand
DCO Competition: Ethanol co-product DCO competing with UCO/Tallow as biodiesel feedstock. ILUC removal boosts DCO credit value too
Biofuel Products Key Insight (Apr 2026)
IATA (12/2025): 2025 SAF at 1.9M MT (2x YoY), but 2026 growth decelerating to 2.4M MT. Only 24% of announced capacity materialized.
EU ReFuelEU non-compliance penalties now enforced from 2026 (Germany: SAF €4,700/MT, e-SAF €17,000/MT). EU announced €3B SAF investment plan + first "pooled double auction" in 2026.
EASA reports 81% of EU SAF sourced from UCO, 17% from animal fats; 69% of feedstock from outside EU (China 38%, Malaysia 12%). Feedstock concentration risk is critical.
📢 [April Update] EPA finalized RFS Set 2 (3/27) — BBD 9.07B gal (2026), 9.20B gal (2027), record-high volumes. SRE 70% reallocation included; eRINs excluded. Effective 6/15. US RD restructuring accelerating: Monroe Energy/Chevron halted co-processing; Vertex Energy/Jaxon Energy plants closed. 2024 new capacity growth at 391M gal, 1/3 of 2022-23 pace. US capacity plateauing at 5.1B gal in 2026.
In Asia: SK Energy completed Korea's first dedicated SAF line (co-processing), achieved first EU export + Cathay 20,000t supply contract (~2027), ISCC certified. ENEOS SAF commercial production 2026; Korea 2027 SAF 1% mandate accelerating. Indonesia B45/B50 uncertain (2026 quota flat at B40 level); crude UCO/POME export ban continues.
UCO/Tallow & Corn/SBO Correlation
Substitution dynamics and price linkage mechanisms in biofuel feedstock markets.
SBO → UCO Price Linkage
When SBO rises, UCO emerges as substitute feedstock, lifting UCO demand/price. Correlation: 0.7-0.85.
Corn → Ethanol → Biofuels
Corn price changes affect ethanol margins, which ripple through biodiesel/RD profitability to tallow/UCO demand.
RIN/LCFS Credit Linkage
RIN and LCFS credit prices are the key variables determining price levels across all biofuel feedstocks. D4 RIN at $0.41 (Feb 2026, lowest since 2020) — driven by 45% BOHO spread decline + record RD credit generation.
Food vs. Fuel Competition
Increasing biofuel use of SBO/corn raises food price concerns, enhancing the strategic value of waste-based UCO/Tallow.
Section 4 · Policy & Regulation
Policy & Regulation
US 45Z deep-dive and comprehensive country-by-country policy tracker.
US 45Z Clean Fuel Production CreditUS Policy
OBBBA (7/4/25) extended 45Z through 2029. Treasury proposed rule 2/3. EPA RFS Set 2 finalized 3/27.
Timeline
Policy Change
UCO/Tallow Impact
2025.7.4
OBBBA signed: 45Z extended to 2029, ILUC removed
SBO credit surge; SAF credit cut ($1.75→$1.00)
2026.1.1
45Z USMCA feedstock restriction in effect
All foreign feedstock (UCO/Tallow) excluded
2026.2.3
Treasury/IRS 45Z proposed rule published
Blending ≠ production. Comments due 4/6; hearing 5/28
2026.2.25
✅ EPA RFS Set 2 final rule submitted to OMB
OMB review completed (finalized 3/27)
2026.3.27
EPA RFS Set 2 finalized
Total 26.81B gal (2026), 27.02B gal (2027). BBD 9.07/9.20B gal. SRE 70% reallocation. eRINs excluded. Effective 6/15
2026 (TBD)
EPA Half-RIN finalization
Foreign feedstock RIN 50% cut if enacted
Feedstock Import ShiftsTrade
Chinese UCO: Jan-Oct 2025 imports down 65% YoY
Brazil Tallow: Q4 below 22M lbs (vs. 154M lb June record) post-50% tariff
Australia Tallow: 10% tariff; further decline expected as 45Z takes effect
UCO Import Rebound: US UCO imports hit 7-month high — pre-regulation stockpiling
Domestic Feedstock ShiftFeedstock
Soy Crush: +13% capacity vs. 2022; Oct 2025 monthly all-time high
SBO BD Share: ~70% of biodiesel feedstock mix
45Z Credits: SBO credit premium rising; ~50% advantage over canola
CI Scores: SBO ~26g/MJ vs UCO ~14g/MJ vs Tallow ~19g/MJ
Country Policy TrackerGlobal
Country
Key Policies
UCO/Tallow Impact
USA
45Z N. America only; RFS Set 2 finalized (3/27, all-time high); Half-RIN proposal; LCFS
Foreign feedstock exit; domestic demand surge
EU
RED III traceability; ReFuelEU SAF 2%→6%; France/Germany end double-counting (2026); CBAM
Higher physical volumes required; SAF demand growth
Indonesia
B40 in effect; B45/B50 target uncertain (2026 quota flat at B40); CPO levy raised; crude UCO/POME export ban
B50 uncertainty bearish for palm; UCO S&D implications
UCO export challenges; food waste recycling; Sinopec SAF
Domestic pivot inevitable
India
E20 acceleration; B5-B7 push; SAF pilot
Large UCO potential; early stage
Brazil
B14 in effect; RenovaBio; tallow export crisis
Asia/Europe alternative markets
Singapore
Neste largest Asia facility; trading hub
UCO/Tallow Asia procurement center
Australia
US tariff impact; domestic mandate discussion
Asia market pivot; premium positioning
Policy Implications for UCO/Tallow Manufacturers
Q1-Q2 2026 policy updates: (1) RFS Set 2 finalized (3/27) — total 26.81B gal (2026), 27.02B gal (2027), all-time highs. BBD 9.07/9.20B gal. SRE 70% reallocation included; eRINs excluded. Published in Federal Register 4/1, effective 6/15. (2) 45Z proposed rule (2/3) comment period closing 4/6; hearing 5/28 — blending ≠ production determination pending. (3) Half-RIN finalization pending — 50% RIN cut for foreign feedstock.
Foreign UCO/Tallow effectively exited the US market with 45Z USMCA restriction (1/1). Chinese UCO US-bound down 65%, but Singapore-bound tripled in Q4 (84,024t) — intra-Asia rebalancing accelerating. Indonesia B45/B50 uncertain (2026 quota flat at B40 level) + crude UCO/POME export ban continues, adding SE Asian UCO supply uncertainty.
Section 5 · Global Trade Flows
Global Trade Flow Changes
US protectionism and EU RED III are fundamentally reshaping global UCO/Tallow trade.
Key Trade Route ChangesTrade Flow
Route
2023-2024
2025-2026 Outlook
Impact
China → US (UCO)
Heavy exports
-65%, effectively blocked
Chinese UCO redirected intra-Asia
Brazil → US (Tallow)
100M+ lbs/month
Collapsed post-50% tariff
Asia/Europe alternative routes
Australia → US (Tallow)
Stable, premium
Gradual 45Z-driven decline
Asia market share expansion
SE Asia → EU (UCO)
Expanding under RED II
RED III traceability constraints
Higher certification costs
SE Asia → Japan/Korea
Small-scale
Rapid growth on SAF demand
New premium market forming
Asia UCO Market UpdateAsia UCO
China Redirect: US -65%, but Singapore-bound tripled Q4 (84,024t). 2025 YTD 180,122t exceeding full-year 2024 (173,340t). 13% VAT rebate canceled. Intra-Asia rebalancing accelerating
SE Asia Boom: Palm-based UCO infra expanding; 15-20% annual collection growth. EU/Japan export focus. Malaysia launching UCO futures market
Japan/Korea SAF: ENEOS/COSMO securing long-term UCO contracts. SK Energy SAF commercial production + first EU export driving UCO demand
Asia UCO Price: FOB Straits $1,060-1,095/MT. EU penalty enforcement + Japan/Korea demand supporting strength
Indonesia: Crude UCO/POME export ban continues (refined grades still exported). B45/B50 uncertainty adding to regional UCO supply ambiguity
Global Tallow Market UpdateTallow
Brazil: Q4 collapse post-50% tariff → Asia/Europe market development
Australia: Asia pivot strategy targeting Singapore/Korea/Japan
US Domestic: Prices at historic highs despite RD slowdown — structural tightness
NZ/Argentina: Emerging as alternatives to Australia/Brazil
Global Price: $1,000-1,200/MT; US Gulf Coast $1,210/MT
Section 6 · UCO Exports by Country · LSEG Customs Data
UCO Exports by Country
Interactive dashboard of Used Cooking Oil export volumes, destinations, and annual trends by country, based on LSEG customs data.
China: Monthly Used Cooking Oil Exports (Dark Blue Bars = Customs)
China: Annual Used Cooking Oil Exports (Customs Data Available till 2025/12)
China Top Destinations for Used Cooking Oil, 2025
Select year for top destinations
China: Cumulative Used Cooking Oil Exports (Customs Data Available till 2025/12)
Data Source: LSEG Data & Analytics (Customs Data) · Latest Data Refresh: 2026-03-21
⚠ This data is compiled with reference to LSEG customs data but may differ from the original source. Please verify through a direct LSEG subscription for exact figures.
Section 7 · SE Asia / Asia UCO Export Prices · UN Comtrade Data
SE Asia / Asia UCO Export Prices
FOB export unit prices based on UN Comtrade customs data (HS 1518).
Unit price = Total FOB export value ÷ Net weight (MT). Only months with 500+ MT exports shown.
📊 Data Coverage
🇯🇵 Japan: 23/26 months (most complete) ·
🇰🇷 Korea: 11 months (2024) ·
🇨🇳 China: 9 months (2024) ·
🇲🇾 Malaysia: 10 months ·
🇮🇩 Indonesia: 10 months ⚠ Vietnam/Thailand not shown due to insufficient Comtrade reporting. ‐‐‐ Gaps are filled with trend-based estimates (dashed lines). *Italic values in the table are estimates.
🇯🇵
Japan FOB
$1,024
▲ Dec 2025
HS 1518 · Comtrade
🇰🇷
Korea FOB
$1,038
▲ Dec 2024
HS 1518 · Comtrade
🇨🇳
China FOB
$937
▶ Dec 2024
HS 1518 · Comtrade
🇮🇩
Indonesia FOB
$1,000
▶ Dec 2025
HS 1518 · Comtrade
🇲🇾
Malaysia FOB
$1,118
▶ Oct 2025
HS 1518 · Comtrade
Asia HS 1518 FOB Export Unit Price Trends ($/MT, UN Comtrade Customs Data)
Dashed = Trend-based estimate · Solid = Actual Comtrade data
Monthly HS 1518 FOB Export Unit Price ($/MT) — UN Comtrade Customs Data
🇨🇳
China FOB
$830-880
▼ -$15 MoM
FFA ≤5%, MIU ≤2% · ISCC
🇲🇾
Malaysia FOB
$870-920
▲ +$10 MoM
FFA ≤5%, MIU ≤2% · ISCC
🇮🇩
Indonesia FOB
$850-900
▶ Flat
FFA ≤5%, MIU ≤3% · ISCC
🇹🇭
Thailand FOB
$880-940
▲ +$20 MoM
FFA ≤4%, MIU ≤2% · ISCC
🇻🇳
Vietnam FOB
$840-890
▲ +$5 MoM
FFA ≤5%, MIU ≤3% · ISCC
🇯🇵
Japan FOB
$960-1,020
▲ +$15 MoM
FFA ≤3%, MIU ≤1% · Premium
🇰🇷
S. Korea FOB
$940-1,000
▲ +$10 MoM
FFA ≤3%, MIU ≤1% · Premium
Asia UCO FOB Price Trend — All Countries ($/MT, Jan 2024 ~ Mar 2026)
2024.07 EU RED III Effective2024.12 US 45Z Final Rule2025.01 EU ReFuelEU Effective2025.06 Indonesia B502025.10 Japan SAF Mandate
YoY Price Change (%)
UCO Price Premium/Discount vs China FOB ($/MT, Latest)
Monthly UCO FOB Price Data by Country ($/MT, ISCC-Certified Standard Spec)
UCO Export Price Comparison by Country (Mar 2026)
Price Matrix
FOB basis, ISCC-certified UCO standard spec (FFA ≤5%, MIU ≤2%). Actual transaction prices vary by contract terms, volume, and certification status.
Country
Current FOB ($/MT)
2024 Peak
vs Peak
MoM
YoY
Key Export Destinations
Notes
China
855
1,080
-20.8%
-$5
-8.0%
Netherlands, Spain, Singapore, Malaysia
EU RED III + 45Z → regional oversupply
Malaysia
895
950
-5.8%
+$5
-3.2%
Netherlands, Singapore, Italy, US
Palm-based UCO; expanding ISCC certification
Indonesia
875
990
-11.6%
Flat
-11.2%
Singapore, China, Malaysia
B50 domestic priority; declining exports
Thailand
910
900
+1.1%
+$10
+4.0%
Malaysia, S. Korea, Netherlands
Quality improvement; premium widening
Vietnam
865
840
+3.0%
Flat
+3.0%
Singapore, Italy, Malaysia
Emerging supplier; rapid volume growth
Japan
990
1,020
-2.9%
+$5
+0.5%
Singapore, S. Korea, Malaysia
SAF mandate + highest quality premium
S. Korea
970
985
-1.5%
+$5
+1.1%
Singapore, Japan, Malaysia
High quality; 2027 SAF mandate preparation
Certification Price Premium ($/MT)
Certification
Sustainability certification premiums on FOB price. EU export requires certification.
Certification
Premium
Market
ISCC EU
+$30-60
EU export mandatory, RED III compliant
ISCC PLUS
+$20-40
Voluntary market (US, Asia)
RSB
+$40-70
SAF market premium
Uncertified
-$50-100
Regional consumption, FAME production
Price by Quality Grade ($/MT)
Quality Grade
Price ranges by FFA/MIU quality grade. China FOB basis.
Grade
FFA
MIU
Price ($/MT)
End Use
Premium
≤ 3%
≤ 1%
920-1,020
SAF, HVO feedstock
Standard
≤ 5%
≤ 2%
830-920
RD, FAME biodiesel
Regular
≤ 8%
≤ 3%
760-840
FAME, regional use
Low Grade
> 8%
> 3%
680-760
Biogas, industrial
SE Asia / Asia UCO Export Price Key Insights
China FOB Declining: With EU RED III tightening traceability requirements and US 45Z policy blocking imports, China's two largest export markets have contracted significantly. China FOB has dropped to $830-880/MT, weighed down by regional oversupply.
Japan/Korea Premium Widening: Demand for premium-grade UCO (FFA ≤3%, MIU ≤1%) is surging with SAF production expansion. Japan FOB has risen to $960-1,020/MT, commanding a $100-140/MT premium over China.
SE Asia Price Divergence: Malaysia and Thailand are seeing price increases driven by ISCC certification expansion and quality improvements. Indonesia is stagnant as B50 domestic mandate reduces export volumes. Vietnam is emerging rapidly as a new supply source with notable price appreciation.
2026 Outlook: EU ReFuelEU Aviation (effective Jan 2025) + Japan SAF mandate + Korea 2027 SAF mandate preparation will continue to support premium ISCC-certified Asian UCO prices. Uncertified and lower-quality UCO faces continued downward pressure from regional oversupply.
Source: UN Comtrade (comtradeapi.un.org) · HS 1518 · FOB exports
· Unit price = Total FOB value ÷ Net weight (MT) · Min 500 MT/month
· Data fetched: 2026-03-21
⚠ HS 1518 covers all chemically modified animal/vegetable fats & oils, not UCO exclusively.
For UCO-specific pricing, Argus/OPIS/Platts subscription data can provide more precise assessments.
Section 8 · Asia UCO Import Navigator · Apr 2026
Asia UCO Import Navigator
Comprehensive guide to importing Used Cooking Oil from Asia to South Korea — supplier landscapes, regulations, logistics, quality specs, and risk management.
Korea UCO Import Intelligence
South Korea UCO Import Market Dashboard
With the 2027 SAF blending mandate approaching, South Korea's UCO imports are hitting all-time highs.
Competition for supply from China and Southeast Asia is intensifying rapidly.
Export Restrictions: Government reviewing UCO export levy to secure domestic SAF feedstock. Modeled on Indonesia's palm oil export levy
SAF Quality Standards: Bio-aviation fuel quality specifications to be finalized mid-2026. Will define imported UCO spec requirements
Domestic Collection: ~200,000 tons/yr produced. Daekyung O&T holds 40-50% market share. SK Energy (acquired Daekyung O&T) is largest collector
UCO Import Quality Specifications
Quality Spec
Critical quality parameters for UCO imports destined for biodiesel, renewable diesel, and SAF production.
Parameter
Biodiesel (FAME)
Renewable Diesel (HVO)
SAF (HEFA)
Notes
FFA (Free Fatty Acid)
≤ 7%
≤ 5%
≤ 5%
Lower = less pre-treatment cost
MIU (Moisture/Impurity)
≤ 2%
≤ 1%
≤ 1%
Directly affects catalyst life
Iodine Value
≥ 70 g/100g
≥ 50 g/100g
≥ 50 g/100g
Virgin oil adulteration indicator
Sulfur Content
≤ 50 ppm
≤ 40 ppm
≤ 40 ppm
Prevents catalyst poisoning
Wax Content
≤ 500 ppm
≤ 300 ppm
≤ 300 ppm
Palm oil mixing detection
ISCC Certification
Recommended
Required (EU)
Required
ISCC EU / ISCC PLUS
⚠️ UCO Fraud & Adulteration Risk
Global Scale: ~1/3 of UCO in Europe's biofuel market suspected fraudulent. T&E flags 80% of EU UCO imports with suspected fraudulent origins. Malaysia exports 3x more UCO than it collects, indicating structural virgin palm oil mixing.
Common Methods: Virgin palm oil (CPO) disguised as UCO → fraudulent renewable energy credit claims. Origin laundering (China → transit country → EU/Korea). Forged ISCC certificates.
Mitigation for Korean Importers: (1) Trade only with ISCC-certified suppliers — include independent audit rights in contracts
(2) Chemical analysis (iodine value, wax content) to detect virgin oil mixing
(3) Full supply chain traceability: collection point → pre-treatment → storage → shipment
(4) Multi-source diversification to reduce single-origin risk
Logistics & Shipping Guide
Logistics
Key logistics considerations for Asia-origin UCO imports to Korea.
Transport Modes: Bulk vessels (5,000-30,000 MT) or ISO tank containers (20-26 MT each). Flexitanks for small volumes
Minimum Volume: Bulk 1-5 KMT, containers min 1-2 TEU (20-52 MT). Loading rate 150+ MT/hour
Lead Time: China 5-8 days, Japan 2-4 days, SE Asia 7-14 days (varies by port)
Major UCO importers and consumers in the Korean market.
SK Energy: Acquired Daekyung O&T (2023) via SK Trading Intl. Controls 40-50% of domestic UCO. First Korean SAF production line completed; EU export + Cathay 20,000t contract. Ulsan HVO plant remains suspended
GS Caltex: UCO collection partnership with GS Retail. Biodiesel & marine biofuel (B24/B30) expansion. Evaluating SAF production
Hyundai Oilbank: Expanding biofuel feedstock imports. Exploring SAF co-processing at Daesan refinery
DS Dansuk: Specialized in PTU (pre-treated UCO) production → export to overseas refiners (P66, etc.). Intermediate processing role
Supply Tightening: China's VAT rebate removal, US tariffs (125%), and growing domestic SAF consumption are rapidly reshaping the Asian UCO export landscape. From April 2025, Chinese UCO exports are projected to fall to 150-200K MT/month (20-40% decline), creating simultaneous price pressure and supply uncertainty for Korean importers.
Structural Price Escalation: FOB Asia UCO prices hit $1,010-1,015/MT in January 2025 (2-year high). Policy-driven demand from EU SAF mandate (2% in 2025) and Korea SAF mandate (1% in 2027) is structurally embedding an upward price trajectory over the medium-to-long term.
Fraud Risk Management Essential: Over 1/3 of global UCO is suspected of adulteration. ISCC certification verification, chemical analysis (iodine value, wax content), and full supply chain traceability are critical risk management priorities for Korean importers.
Strategic Recommendations: (1) Diversify away from China dependency (50%+) — build multi-sourcing from Thailand, Indonesia, Japan (2) Secure term contracts for volume and price stability (3) Leverage PTU toll-processing export/re-import model to maximize value (4) Build early feedstock pipeline ahead of 2027 SAF mandate
Section 9 · Major Players Update · Apr 2026
Major Company Updates
Latest strategies and performance of key global biofuel and feedstock companies.
Neste (Finland)Producer
World's largest renewable diesel & SAF producer.
Singapore: Asia's largest SAF/RD facility (1M+ MT/yr). 2025 expansion complete; Asia UCO/Tallow procurement hub
Rotterdam: 1.3M tonne/yr expansion → 2.7M tonne/yr site total, H1 2026 completion. Overall capacity 6.8M tonne/yr. UBS upgraded to "buy"
Feedstock: 90%+ waste/residue (UCO/Tallow). Strengthening traceability for premium sourcing
Performance: 2025 RD margin pressure impacting profitability. Diversifying into higher-margin SAF
Diamond Green Diesel (US)Producer
Valero & Darling Ingredients JV. Largest US RD facility.
Capacity: Port Arthur, TX — 1.2B gal/yr, largest US renewable diesel facility. 50% of 470M gal capacity convertible to SAF — now among world's largest SAF producers
Darling Ingredients: World's largest animal by-product (tallow/grease) collection network; vertical integration advantage. Sold $50M in IRA production tax credits from DGD JV
Strategy: Domestic feedstock priority under 45Z + RFS finalized (BBD 9.07B gal) securing demand base. SAF conversion accelerating
Phillips 66 (US)Producer
Rodeo Renewed (California) RD conversion project.
Rodeo Renewed: 2024 completed world's largest RD-only conversion (~800M gal/yr)
2025-26: RD margins below 2024 levels; announced production curtailment. RFS finalized securing demand base, but margin recovery uncertain
Feedstock Shift: Moving away from imported UCO to domestic SBO/Tallow
Risk: California LCFS credit decline could further compress margins
TotalEnergies / Marathon / CVRProducers
Major European & US refiners' biofuel strategies.
TotalEnergies: La Mède/Grandpuits SAF expansion. European UCO procurement focus. 2030 target: 1.5M MT SAF
Marathon (Martinez): California refinery RD conversion (~700M gal/yr). Maintaining SAF plans despite margin pressure
Restructuring: Monroe Energy/Chevron halted RD co-processing; Vertex Energy/Jaxon Energy closed plants. Love's Heartwell Renewables (80M gal) only confirmed new plant
Common Theme: RFS finalized (3/27) secures demand base, but 45Z detailed rules still pending. New investments largely on hold
Asia Key PlayersAsia
Major players in Japan, Korea, Singapore, and China.
ENEOS (Japan): 2026 commercial SAF production start. Wakayama SAF plant (Mitsubishi Corp JV) targeting 300K tonne (400K kL)/yr from FY2028. Halted CO2-based synthetic fuel to focus on biofuel. Expanding long-term UCO procurement
COSMO Energy (Japan): SAF production facility under construction. Intensifying tallow/UCO procurement
SK Energy (Korea): Completed Korea's first dedicated SAF production line (co-processing). Achieved first EU SAF export + Cathay 20,000t supply contract (~2027), ISCC certified. Korean Air supply to begin. Ulsan HVO plant remains suspended
GS Caltex (Korea): Evaluating biofuel business entry. SAF production feasibility study
Sinopec (China): SAF capacity investment (~100K MT/yr). Boosting domestic UCO consumption linked to aviation carbon targets
Pertamina (Indonesia): Largest palm-based biodiesel producer. 2026 quota flat at B40 level; B45/B50 final decision pending. Cilacap refinery Phase 2: UCO-based HVO/SAF targeting 300K kL/yr (2026 online). Crude UCO/POME export ban continues
Grain Majors & TradersTraders
ABCD and major trading houses' biofuel feedstock strategies.
ADM: Top beneficiary of US crush capacity expansion. Growing SBO biofuel supply contracts; investing in UCO collection
Glencore Ag: Optimizing global Tallow/UCO logistics. Building new S. America → Asia trade routes
2025-2026 Company Trends Summary
US RD Restructuring Accelerating: Monroe Energy/Chevron halted co-processing; Vertex Energy/Jaxon Energy closed plants. 2024 new capacity growth at 391M gal (1/3 of 2022-23 pace). RFS Set 2 finalized (3/27, BBD 9.07B gal) secures demand base, but 45Z details still pending.
SAF Pivot Accelerating: DGD now has 50% SAF conversion capability (470M gal), becoming a top global SAF producer. Neste, TotalEnergies, ENEOS also shifting to higher-margin SAF. This drives further premiums for low-CI, high-quality UCO/Tallow.
Asian Players Update: SK Energy rapidly emerging as a key SAF player — first Korean SAF line completed, EU export achieved, Cathay 20,000t contract, ISCC certified. ENEOS leading Japan with SAF commercial production + HVO Plant (2030). Japan/Korea refiner competition for Asian UCO/Tallow intensifying. Korea's 2027 SAF mandate is the key demand catalyst.
Section 10 · Manufacturer Reference
UCO/Tallow Manufacturer Guide
Quality specs, grading, and strategic reference for UCO/Tallow producers and exporters.
UCO Quality Specs & CertificationQuality
Spec
Standard
Premium
Notes
FFA
≤ 5%
≤ 3%
Lower = premium
MIU
≤ 3%
≤ 1%
EU RED III tightening
Iodine Value
80-120
80-100
Feedstock indicator
ISCC/RSB Cert
Required for EU
Premium market entry
Traceability mandatory
Tallow Grades & End MarketsGrade
Grade
FFA
Primary Use
$/MT
Fancy/Edible
≤ 2%
Food, confectionery
1,100-1,300
Top White/BFT
≤ 4%
Oleochemicals, soap
950-1,100
Technical
5-10%
Biofuel (RD/FAME)
850-1,000
Low Grade/Brown
> 15%
Biogas, low-grade fuel
600-800
Asia Country-by-Country UCO/Tallow Quality Specs
Asia Quality
Comparative overview of UCO/Tallow quality levels across major Asian supply countries. Korea and Japan consistently deliver premium quality, while China exhibits significant variability.
Palm-based UCO; collection infra expanding. Growing ISCC certification
Indonesia
3-7%
1-3%
5-10%
Mid (B)
Palm UCO-centric; some quality variance but large volume supply. B40/B50 domestic priority
India
5-10%
2-4%
8-15%
Mid-Low (C+)
Early-stage collection infra; quality management gaps vs potential. High growth potential
China
3-10%
1-5%
5-15%
Variable (B~D)
Mass production capable but wide quality variance. Uneven fatty acid profiles; blending issues persist. RED III certification challenges
Asia Quality Specs Key Takeaways
Korea & Japan: Systematic food hygiene frameworks and high collection standards enable consistent premium-quality UCO (FFA ≤3%, MIU ≤1%). Optimal for SAF feedstock; strong buyer preference for long-term offtake.
SE Asia (Malaysia & Indonesia): Palm-based UCO enables large volumes, but quality varies by collection channel. ISCC certification and QC improvements underway.
China: World's largest UCO supplier, but wide quality variance by region and collector. Gutter oil contamination risk, uneven fatty acid profiles, and RED III certification difficulties are persistent discount factors. Certified large-scale suppliers offer acceptable quality, but small collectors require caution.
Price Premium Reference: Korea/Japan UCO commands $30-80/MT premium over Chinese origin. SAF-eligible material can fetch an additional $50-100/MT premium.
Strategic RecommendationsStrategy
1. Export Market Diversification
Reduce US dependency. Invest in ISCC/RSB certification for Japan, Korea, Singapore SAF markets and EU entry.
2. Traceability Systems
EU RED III and global regulations demand traceability. Blockchain-based tracking + ISCC certification are essential for premium access.
3. Quality Upgrading
Achieve premium FFA/MIU specs for price competitiveness. SAF feedstock market pays significant quality premiums.
4. Long-term Offtake Contracts
Hedge price risk with long-term supply agreements. Japanese/Korean refiners actively pursuing SAF feedstock contracts for 2030 targets.
Section 11 · Outlook & Calendar
Outlook & Key Events
Key Policy Calendar
Timeline
Event
Impact
2026.3.27
✅ RFS Set 2 finalized
Total 26.81B gal (2026), 27.02B gal (2027). BBD 9.07/9.20B gal. Effective 6/15
2026.4.6
45Z proposed rule comment period closes
Industry feedback scope determination
2026.5.28
45Z public hearing
Blending as 'production' final debate
2026 H1
EU first SAF 'pooled double auction'
Investment certainty for SAF producers
2026
EU ReFuelEU non-compliance penalties enforced
SAF real demand forced; feedstock price support
2026.6.15
RFS Set 2 effective date
Record-high volumes take effect
2026
Indonesia B45/B50 final decision pending
2026 quota flat at B40; palm/UCO S&D implications
2026 (TBD)
EPA Half-RIN finalization
Foreign feedstock RIN 50% cut if enacted
2027
Korea SAF 1% mandate launch
~70K MT SAF; Asia feedstock S&D shift
2030
EU SAF 6% + e-SAF 1.2% · Japan SAF 10%
UCO/Tallow structural price uplift
Market Outlook Key Points
UCO: RED III origin rules widening Asia-Europe price gap. SE Asia collection infra investment accelerating
Tallow: US domestic premium persistent. Australia/Brazil pivoting to Asia
SAF: 30M+ MT/yr demand by 2030; feedstock competition intensifying
Corn: E15 policy outcome critical for ethanol demand; weather-driven volatility
SBO: Biofuel share to surpass 50% (~2027). S. America exports as price stabilizer
2026 Comprehensive Outlook (April Update)
Four structural developments confirmed in Q2 2026: (1) RFS Set 2 finalized (3/27) — record-high volumes (BBD 9.07B gal) securing US domestic demand base, (2) US 45Z USMCA restriction + ILUC removal → domestic SBO/tallow dominance, (3) EU ReFuelEU penalties enforced + €3B investment plan → SAF feedstock demand surge, (4) US RD industry restructuring — 4 plant closures/shutdowns; capacity plateauing.
US: RFS finalized + 45Z ILUC removal creating structural domestic demand expansion. However, RD margin pressure driving industry consolidation; DGD's 50% SAF conversion is emblematic. EU: Penalty enforcement forcing real SAF demand; UCO price structurally supported. Asia: SK Energy SAF production + ENEOS SAF start + Korea 2027 mandate driving premium UCO/Tallow competition. Indonesia B45/B50 uncertainty adds regional supply variable.