Leading commodity and energy price provider S&P Global Platts (Platts) has launched hydrotreated vegetable oil (HVO) values in the Americas, Markets Business Insider reported on 1 December.
The launch of the daily assessments was aimed at bringing transparency to the transport and refining industry as it moved towards the use of low-carbon intensive fuel, Markets Business Insider said.
HVO – also known as renewable diesel – is a biomass-derived transportation fuel suitable for use in diesel engines.
Like biodiesel, HVO is not a fossil fuel. It is made from non-petroleum renewable resources such as waste fats, vegetable oils and greases.
The new prices followed Platts' launch of Europe's price references for HVO in 2020, and sustainable aviation fuel (SAF) prices for the Americas and Europe in the third quarter of 2020.
“Platts daily renewable diesel prices bring transparency to a market poised to see exponential growth in the coming years,” said Ian Dudden, global pricing director, metals and agriculture, S&P Global Platts.
Platts said it had noticed growing interest in renewable fuels across the transportation markets and a series of announcements by refiners and other US-based companies had highlighted the expected increase in supply.
The US federal Renewable Fuel Standard (RFS), California Low Carbon Fuel Standard (LCFS) and Blenders' Tax Credit (BTC) had also supported the growth of the renewable diesel market.
S&P Global Platts Analytics forecast that global renewable diesel supply would exceed 11bn litres (3bn gallons) in 2023 and 19bn litres (5bn gallons) by 2025.
The daily Platts Americas renewable diesel values (known as Platts US West Coast RD) had been published from 1 December and reflected the cost of producing renewable diesel from tallow via hydro-processing, expressed in US$/gallon, Markets Business Insider said.
As physical market trading for renewable diesel had not reached sufficient volumes to support spot price assessments, the cost-based methodology was calculated by S&P Global Platts Analytics based on existing Platts assessments and other fixed costs.
S&P Global Platts, a division of S&P Global, covers the oil, gas, LNG, power, petrochemicals, metals, agriculture and shipping sectors.