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The biomass-based diesel market finds itself in a challenging environment. The soybean oil-to-heating oil (BOHO) spread is used as a measure of profitability in producing biodiesel and renewable diesel from soybean oil. Many feedstock choices tend to follow the BOHO spread.

A high, or rising BOHO spread, indicates it is, or becoming more expensive to produce biodiesel from soybean oil. When the BOHO spread is high, RIN values generally climb to help incentivize production. Without RINs, producing biodiesel at these levels would not be economically feasible.

Year to date, the BOHO spread has fallen 42 percent as ULSD heating oil futures and soybean oil futures have moved in opposite directions. ULSD prices are up eight percent while soybean oil values are down six percent.

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