Biodiesel Margins Fall for Fourth Time in Five Weeks

In early November, margins looked like 2022 might have a favorable blending outlook.  Despite the 2022 biomass-based diesel RINs trading at a discount to the 2021 RINs in early November, some producers speaking with The Jacobsen felt the new year would bring higher RIN values that would support margins. This has yet to happen.

Biomass-based diesel RINs for 2022 were trading at $1.33 on November 11.  A penny below Friday’s settlement at $1.34.  Feedstock prices have continued to rise.  Soybean oil is up over two cents per pound during the same period.  Yellow grease and used cooking oil are also up two cents per pound, while distillers’ corn oil, tallow and choice white grease are up approximately nine cents per pound.

Rising feedstock costs are causing margins to fall.  Higher RIN values are needed to incentivize production. One Midwest producer…