Biodiesel margins continued to fall during the week ending Friday November 8, with rising feedstock cost pushing the soybean oil/heating oil (BOHO) spread to its highest level in more than a year.

The BOHO spread measures the profitability of producing biodiesel from soybean oil. The higher the spread, the more costly the production. When the spread rises, renewable identification number (RIN) credit values generally increase to offset rising production costs.

The BOHO spread increased 15% during the week ending Friday. Biodiesel (D4) RIN prices climbed 13%. Biodiesel gross margins were already negative and with the $1 per gallon Blenders Tax Credit (BTC) added, it only provided the slimmest margin.

“Spot margins for biodiesel are [about] $0.10 a gallon. And so, if you take the BTC out, [the margin becomes] negative $0.90 [per gallon],” Robert Day, Darling Ingredients’ executive, mentioned in the company’s October 2024 analyst call.

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