[RE]fuel Market Report Commentary

Prices in the UK’s Renewable Transport Fuel Certificate market saw hefty falls through the course of the week, with market sources seeing values arc downwards from levels around 19p last week to trade at 15.8p by Wednesday.

Offers for Year 10 and Year 11 tickets were subsequently heard at that level. 

In part, that move was driven by renewed pressure on the biodiesel complex, with market sources seeing “collapsing biofuel prices” as the latest EU position on biodiesel imports was digested by market participants.

“This is the ticket market catching up with the biofuel market. Vegoils are low, have been under pressure for some time, it’s now gone extra low because of the EU changes in import regime,” one trader said with

Fears over the EU’s stance on imports of soy-based biodiesel from Argentina and palm-based from Asia are dragging down UCOME and UCO have pushed values in the biodiesel complex lower.

“My UCOME clients are falling like nine pins. Even UCO has gone, there are no UCOME bids right now,” a second source said,

UCOME prices fell towards 800 euro during the week, with drop accentuated as the value of the US dollar versus the euro and pound sterling plunged midweek.

Alongside the fall in the US dollar’s value, the price of oil also moved upwards, with diesel prices hitting multi-year highs in the upper $620 level, meaning the theoretical cap for certificates was squeezed ever tighter between resurgent mineral oil prices and heavily-pressured biofuel prices.

The silver lining, however, remained news that the legislative framework underpinning the expanded RTFO continued its journey through parliament. 

“I’d be surprised if they drop much more,” the trader said.

Energy Census assessed Year 11 certificates at 15.7p, in line with offers heard at 15.8p, with Year 10 certificates assessed lower by half a penny at 15.2p, in line with a Year 10-Year 11 swap trade heard earlier in the week.