By Khor Yu Leng, yuleng@segi-enam.com & Claudia Nyon research@segi-enam.com
Industry players have been agog at news from Argus reporting a pile up of tallow vessels outside Singapore shortly after production stoppage at Neste’s Singapore biorefinery slowed down purchases of tallow feedstock. Equipment failure around mid-October at the refinery put the production of renewable diesel to a standstill, as covered by us here.
Three vessels have been pinpointed as carrying tallow and facing trouble offloading the commodity in Singapore: Stolt Renge, Stolt Sakura and Stolt Satsuki.
We’ve tracked these vessels and our findings confirm this.
The Stolt Renge, which has a carrying capacity of 12,343 tonnes sailing under the flag of Singapore, has a current load condition of being in ballast (i.e., not carrying any cargo but containers filled with sea water to add weight). It departed from Port Klang and arrived in Singapore on 6 November, 9.15 a.m. Since late October, the Stolt Renge seems to have been shuttlingbetween Port Klang and Singapore. In early October, the Stolt Renge stationed itself in Singapore for 21 days.
Another such ship similarly found itself stationed in Singapore for long periods of time in early October: the Stolt Sakura was stationed for 23 days before heading to Port Klang where it moved between the different anchorages within Port Klang for the next 12 days. As last checked, the Stolt Sakura is now stationed in Kuantan with a load condition of being in ballast. It has a carrying capacity of 12,817 tonnes sailing under the flag of Singapore.
Unlike the earlier ships, the Stolt Satsuki has found herself stationed in Singapore since 21 October since its arrival from Brisbane. It has a load condition of being laden with a carrying capacity of 12,342 tonnes sailing under the flag of Singapore.
The collective dates indicating inactivity in Singapore since early October coincides with reports in early October that Neste’s Singapore diesel line was taken offline after equipment failure following scheduled maintenance work. In early November, Neste reportedly also temporarily shut down its refinery in Rotterdam, Netherlands, following a fire. Neste subsequently lowered its full-year guidance for renewable products sales volumes. These delays reflect a broader supply chain issues.
Demand-side, soaring US biofuel demand is reshaping trade flows. In early November (as reported prior to the US election) significantly changed global trade flows of tallow in the past two years, boosting world trade to a new high of 2.5 Mn T in Oct/Sept 2023/24 (+24%).
The story on tallow, as one of several diesel feedstocks, is just one facet of the broader narrative surrounding renewable diesel’s future. In the first four months of 2024, imported Brazilian tallow in the US for biofuel production surged by 377% compared to previous years, edging out US soybean farmers. From Jan to Sept 2024, reports came in that the US flooded its market with a record 3.9 billion pounds of imported UCO, up 98% year-on-year, 55% of which originated from China.
Some experts suggest the volume of UCO imported by the US in 2024 was enough to replace the oil from more than 332 million bushels of soybeans (equivalent to Minnesota’s entire 2024 crop).Others counter that the demand for soy oil has consistently increased since food use has remained steady since the mid-2000s after the FDA set rules on trans fat use in foods. They argue that imports are necessary to meet domestic demands for biomass-based diesel, be it feedstocks or finished products.
Renewable diesel made from tallow and UCO has a lower carbon score than soybean oil and hence was eligible for higher tax credits in California, where a high proportion of US green diesel is consumed.
However, with president-elect Donald Trump’s unannounced tariff plans, it remains possible that a blanket import tariff could close the door on imported (and cheaper) renewable diesel supplies.
Coupled with Neste’s refinery disruptions, perhaps renewable biofuels in general are at risk? The Trump administration’s pick for the EPA administrator, Lee Zeldin, has already resulted in the biggest slump in soybean oil since July 2024, as noticed by experts a few days ago. Experts typically zoom in on soybean oil as it tends to react first to any headlines related to the RFS. Historically, Lee Zeldin has consistently voted against the Renewable Fuel Standard (RFS) and soybean oil has been one of the main feedstocks used in biofuel production.