Core 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].

Core Viewpoint - The report from Kaiyuan Securities highlights the increasing demand for biodiesel in China and globally, driven by terminal demand growth and regulatory changes, particularly the implementation of the RED III directive in the EU starting in 2026 [1][4]. Domestic Market Developments - The first domestic B5 biodiesel injection for internal trade was completed on November 20, marking a significant step in the use of biodiesel in domestic shipping [2][3]. - The Ministry of Commerce's recent policy supports the blending of domestic biodiesel with marine fuel oil, which is expected to enhance the domestic biodiesel market [2]. International Market Trends - The "IMO net-zero framework" is anticipated to increase the demand for biodiesel, with projections indicating that Singapore's marine fuel injection could require millions of tons of biodiesel by 2030 [3]. - China's bonded marine fuel injection is expected to reach 1,988 million tons in 2024, with a potential increase of nearly 400 million tons in biodiesel demand if 20% biodiesel is blended [3]. Regulatory Changes in the EU - The RED III directive will raise the renewable energy consumption target in the EU from 32% to at least 42.5% by 2030, significantly increasing the demand for biodiesel, especially second-generation biodiesel [4]. - The removal of the double carbon reduction policy for used cooking oil (UCO) is expected to nearly double the demand for biodiesel and UCO in the EU [4]. Beneficiary Companies - Companies likely to benefit from these trends include Zhuoyue New Energy (688196.SH), Haineng Technology (300072.SZ), Jiaao Environmental Protection (603822.SZ), and Shanggou Environmental Energy (000803.SZ) [5].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The report highlights a sustained increase in demand for biodiesel driven by terminal demand growth and regulatory changes, particularly the implementation of the EU RED III directive starting in 2026, which is expected to significantly boost biodiesel demand [5][7] - The successful completion of China's first domestic B5 biodiesel injection for inland trade marks a significant step in increasing domestic biodiesel consumption, with projections indicating a substantial increase in demand for biodiesel in both domestic and international markets [6][7] Summary by Sections Industry Trends - The report indicates a positive outlook for the biodiesel industry, with prices for first and second-generation biodiesel increasing by 11% and 24% respectively since the beginning of 2025 [5] - The global context of carbon reduction is expected to further enhance the demand for biodiesel, particularly in light of the EU's stricter carbon reduction targets [7] Regulatory Developments - The EU's RED III directive aims to increase the renewable energy consumption target from 32% to at least 42.5% by 2030, which will likely double the demand for biodiesel and its raw materials [7] - The cancellation of the double carbon reduction policy for used cooking oil (UCO) as a biodiesel feedstock is expected to further increase demand [7] Market Opportunities - The report identifies potential beneficiaries of the biodiesel demand surge, including companies like卓越新能, 海新能科, 嘉澳环保, and 山高环能 [7] - The anticipated increase in biodiesel demand is supported by both domestic initiatives and international regulatory frameworks, indicating a robust growth trajectory for the industry [6][7]