Buoyant demand for biodiesel in Germany, especially rapeseed methyl ester, hasn’t just driven biodiesel prices up, but also rapeseed oil prices.

Wholesale prices for biodiesel have seen a sharp rise since Aug. 14, from 70.5 euro cents per liter ($2.95 per gallon) in mid-August to recently 91.6 euro cents per liter ($3.82 per gallon). This translates to an approximately 30 percent increase. The current price exceeds the level a year ago by 27 percent. The mark of 90 euro cents per liter was not cracked until November 2018.

According to Agrarmarkt Informations-Gesellschaft (mbH), the price increase is due to growing demand for biodiesel. From October onwards, rapeseed methyl ester (RME), without any additives, is the primary material blended into diesel fuel in Germany and northern EU nations to ensure winter diesel quality. The fatty acid composition of rapeseed oil accounts for the edge rapeseed oil-based biodiesel has over biodiesel based on soybean oil and, above all, palm oil.

As a result, demand for RME rises every year in September, driving up prices. The requirements for winter diesel apply to diesel fuel all over the northern part of the EU. The above-mentioned property of rapeseed oil is unique. For this reason, national commitment targets indicate a minimum need for rapeseed methyl ester. Moreover, petroleum companies, which are subject to the obligation to meet the GHG reduction quota, are required to meet such quota by the end of the calendar year. This is why they are stocking up on RME for the fourth quarter. In 2019, the companies started to order RME as early as mid-August, a month earlier than the previous year.

Higher demand for RME has also pulled up wholesale prices for rapeseed oil, which recently reached 73.5 euro cents per liter. Only prices for agricultural diesel have remained at a relatively constant level of around 76 euro cents per liter since July 2019.