Biodiesel prices soar in Germany, up 30% compared to mid-August

In Germany, UFOP reports that the buoyant demand for biodiesel, especially rapeseed methyl ester, hasn’t just driven biodiesel prices, but also rapeseed oil prices. Wholesale prices for biodiesel have seen a sharp rise since 14 August 2019, from 70.5 euro cents per litre in mid August to recently 91.6 euro cents per litre. This translates to an approximately 30 per cent increase.

The current price exceeds the year-ago level by 27 per cent. The mark of 90 euro cents per litre was not cracked until November in 2018. According to Agrarmarkt Informations-Gesellschaft (mbH), the price increase is due to growing demand for biodiesel. From October onwards, rapeseed methyl ester (RME), without any additives, is the primary material blended into diesel fuel to ensure winter diesel quality. The fatty acid composition of rapeseed oil accounts for the edge rapeseed oil-based biodiesel has over biodiesel based on soybean oil and, above all, palm oil.

As a result, demand for RME rises every year in September, driving up prices. The requirements for winter diesel apply to diesel fuel all over the northern part of the European Union. The above-mentioned property of rapeseed oil is unique. For this reason, national commitment targets indicate a minimum need for rapeseed methyl ester. Moreover, mineral oil companies, which are subject to the obligation to meet the GHG reduction quota, are required to meet such quota by the end of the year (calendar year = quota year). This is why they are stocking up on RME for the fourth quarter. In 2019, the companies started to order RME in mid August already. This was a month earlier than the previous year.

Higher demand for RME has also pulled up wholesale prices for rapeseed oil, which recently reached 73.5 euro cents per litre. Only prices for agricultural diesel have remained at a relatively constant level of around 76 euro cents per litre since July 2019.