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LCFS hovers below $100

PRIMA’s LCFS Index finished Friday at $98, bringing the week’s average mid-market value to $97, up by 5 cents WoW. The best bid indication increased $1 from Thursday to sit at $96 while the best offer held steady at $100. The market saw a dearth of fresh offers and bids on Friday after more active trading earlier in the week. In total more than 50,000 tons credits have been confirmed trading so far this month.

Diamond Green Diesel, the renewable diesel plant jointly operated by Darling Ingredients and Valero, produced 41.5mn gal of renewable diesel in Q3, of which 39.9mn gal was reported sold. The plant has produced120.9 mn gal of renewable diesel in the first nine months of this year, outstripping a current nameplate capacity of 150mn gal/yr. The company is optimistic the biodiesel blender’s tax credit will be reinstated, which would give Darling $20mn of additional biodiesel-related income for the third quarter if the bill is passed.

Darling has two new US rendering plants scheduled to be completed in the second half of next year Q3-Q4 2016 suggesting increased availability of animal fats for biodiesel and renewable diesel processing. Waste biodiesel producers have already benefited from weaker third quarter waste oil prices, with yellow grease averaging $18.02/cwt in October, down more than $6/cwt from June of this year. EIA reported 809mn lbs of yellow grease consumed as biodiesel inputs YtD through the end of August, up 14% YoY.

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