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Summary
European bio and renewable fuels fell sharper than fossil diesel in October. FAME 0 NWE FOB averaged $1,587/mt, down 10.8% MoM, while ICE LSGO fell just 1.5%. The green premium compressed across the complex: the FAME 0 diff to LSGO halved to a $173/mt average and closed at $90/mt; UCOME lost $198/mt and HVO Class II $175/mt; SAF HEFA dropped $446/mt. The mechanism was demand-side: with most obligated buyers covered for 2026 mandates, the compliance bid that holds premiums over fossil weakened, and uncertainty over German GHG-quota certificate rules added pressure. RME was the exception, holding its diff on the winter cold-flow premium. The FAME 0 curve repriced at the back, M12 up $106/mt with M1 flat, pointing traders to the 2027 compliance year as the next demand trigger.
Price trends
FAME 0 fell 10.8% MoM, the steepest monthly drop in 13 months, as the premium to fossil eroded
- FAME 0 NWE FOB opened $1,746.75/mt (1 Oct), closed $1,519.25/mt (30 Oct), averaged $1,586.94/mt vs September's $1,778.43/mt (−10.8% MoM, +18.7% YoY)
- Monthly high $1,756.00/mt (5 Oct), low $1,489.25/mt (29 Oct); the $266.75/mt intra-month range was the widest of the past 13 months, vs September's $221.00/mt
- Largest single-day fall −$92.75/mt (6 Oct); largest move +$128.50/mt (13 Oct), reversed within three sessions
- W3 was the breakdown week at −6.3% WoW, taking FAME 0 below $1,500/mt; W4 held flat at the lows, with no rebound into month-end
| Week | Avg ($/mt) | WoW | Note |
|---|---|---|---|
| w/c 5 Oct | 1,628.55 | −4.4% | Sharpest daily falls 6–8 Oct |
| w/c 12 Oct | 1,620.00 | −0.5% | 13 Oct spike reversed |
| w/c 19 Oct | 1,517.85 | −6.3% | Breakdown below $1,500/mt |
| w/c 26 Oct | 1,516.55 | −0.1% | Plateau at the lows |
Source: GX Go
1–2 Oct fall in the week commencing 29 Sep.
Feedstock trends
Waste feedstocks barely moved as finished biodiesel fell 11%, squeezing producer margins
- UCO NWE FOB averaged $1,394.89/mt (−0.8% MoM) while UCOME fell 11.0%; feedstock costs held as finished-product value dropped, compressing waste-based biodiesel margins
- UCO only started to follow late: NWE FOB slipped from $1,430.00/mt (open) to $1,352.50/mt (close), −5.4%; UCO NWE CIF averaged $1,287.61/mt (−1.4% MoM)
- Tallow Cat 1&2 averaged $1,022.91/mt (−2.0%) and Cat 3 $1,265.80/mt (−2.2%): input weakness was mild across the waste-fats pool, not UCO-specific
- China-origin UCO CIF NWE netforward averaged $1,367/mt, +2.3% MoM, against the softer European UCO trend (based on 5 weekly assessments)
Cross-commodity dynamics
Green premium compressed across biodiesel, HVO and SAF; RME the only grade to hold
| Diff to LSGO ($/mt) | Sep Avg | Oct Avg | Change |
|---|---|---|---|
| FAME 0 | +353.17 | +172.95 | −180.22 |
| UCOME | +480.44 | +282.36 | −198.08 |
| HVO Class II (vs M1) | +1,519.49 | +1,344.02 | −175.47 |
| SAF HEFA (vs M1) | +1,446.08 | +1,000.27 | −445.81 |
| RME | +444.53 | +415.17 | −29.36 |
Source: GX Go
- ICE LSGO fell 1.5% MoM, so the compression came from the biofuel side: with obligated buyers largely covered for 2026, the mandate bid supporting premiums over fossil fell away
- Uncertainty over German GHG-quota certificate rules weighed on the value blenders attach to physical biofuels
- FAME 0 closed at +$90/mt to LSGO (low +$49/mt), near the level at which biodiesel competes with fossil diesel on cost; UCOME closed at a month-low +$190/mt
- RME held, losing $29/mt as the winter cold-flow (CFPP) premium supported the grade; RME flat price fell only 2.2%
- SAF HEFA lost the most, −31%; the SAF 2% blend rose 4.0% as its 98% fossil-jet component dominated
Curve structure
Back repricing; FAME 0 M12 gained $106/mt with M1 flat, halving the backwardation
| FAME 0 | Month-Start | Month-End | Change |
|---|---|---|---|
| M1-M2 | +$78.75/mt | +$34.75/mt | −$44.00 |
| M1-M6 | +$167.25/mt | +$111.75/mt | −$55.50 |
| M1-M12 | +$220.50/mt | +$116.25/mt | −$104.25 |
Source: GX Go
- Back repricing: M1 (Nov) +$2.00/mt vs M12 (Oct-27) +$106.25/mt; prompt weakness did not extend into 2027 deliveries
- HVO Class II showed bear steepening: M1 −$113.25/mt vs M12 −$50.75/mt, M1-M12 narrowing from $410.50 to $348.00/mt
- RME M1-M2 widened from $93.75 to $119.75/mt, the winter structure firming at the front
- Flatter FAME 0 structure improves storage economics into the 2027 compliance year
Price volatility
FAME 0 CV hit a six-month high of 5.52% while RME fell to a six-month low
| CV (%) | May | Jun | Jul | Aug | Sep | Oct |
|---|---|---|---|---|---|---|
| FAME 0 | 2.68 | 1.74 | 2.83 | 4.20 | 3.71 | 5.52 |
| UCOME | 1.94 | 1.58 | 3.28 | 2.38 | 3.19 | 4.18 |
| RME | 2.25 | 2.41 | 4.07 | 3.88 | 2.00 | 1.65 |
| HVO Class II | 2.25 | 2.44 | 3.79 | 3.38 | 4.44 | 3.10 |
| UCO NWE FOB | 0.91 | 0.63 | 1.16 | 1.12 | 1.62 | 1.85 |
Source: GX Go
- FAME 0 CV exceeded the August peak of 4.20% by 1.3x; UCOME also set a six-month high, as the grades exposed to premium erosion carried the risk
- RME's 1.65% shows the winter premium anchoring the grade; hedges calibrated across FAME grades should not assume shared volatility this season
Something to watch
- FAME 0 diff to LSGO as the parity gauge:
- Observation: closed at +$90/mt, low of +$49/mt
- Why it matters: a premium at or below zero makes biodiesel cheaper than fossil diesel, opening discretionary blending beyond mandates and putting a floor under demand
- What to monitor: daily FAME 0 diff close; any move below +$50/mt
- Compliance-year turn:
- Observation: prompt flat while M12 gained $106/mt
- Why it matters: obligated buying for 2027 obligations is the catalyst for premiums to rebuild from the front
- What to monitor: FAME 0 M1-M2 into December and January
- German GHG-quota rule review:
- Observation: rules on certificate eligibility under review
- Why it matters: the outcome sets the certificate value blenders pay against, feeding directly into biodiesel premiums
- What to monitor: German environment ministry decision on the review
Note: All figures, prices and market activity referenced in this report are based on the period 1 to 30 October 2026.
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