Zhong Guo Neng Yuan Wang·2025-11-21 09:06Core Viewpoint - The report highlights the increasing demand for biodiesel driven by terminal demand growth and regulatory changes, particularly in the context of the EU's RED III implementation and domestic initiatives in China [2][4]. Group 1: Biodiesel Price Trends - As of November 19, the FOB prices for China's first and second generation biodiesel are $1,165 and $1,900 per ton, reflecting increases of 11% and 24% respectively since the beginning of 2025 [2][3]. - The steady growth in biodiesel prices since 2025 is attributed to rising terminal demand [2]. Group 2: Domestic and International Demand Drivers - The first domestic B5 biodiesel injection for internal trade was completed, marking a significant step in the domestic biodiesel market [3]. - The implementation of the "IMO net-zero framework" is expected to increase the demand for biodiesel in both domestic and international shipping [3]. - In 2024, China's internal trade ship fuel consumption is projected to be 4.48 million tons, indicating substantial potential for biodiesel substitution in the future [3]. Group 3: EU Regulatory Impact - The RED III legislation, effective from 2026, raises the renewable energy consumption target from 32% to at least 42.5%, and the renewable energy target in the transport sector from 14% to 29% [4]. - The removal of the double carbon reduction policy for used cooking oil (UCO) is expected to significantly boost the demand for biodiesel and UCO, potentially doubling the demand [4]. - It is estimated that the demand for biodiesel produced from UCO in the EU will increase by at least 400,000 tons following the RED III implementation [4]. Group 4: Beneficiary Companies - Companies such as卓越新能, 海新能科, 嘉澳环保, and 山高环能 are identified as potential beneficiaries of the growing biodiesel market [5].