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For biodiesel and renewable diesel manufacturers, tallow isn’t just an ingredient. It’s a crucial feedstock driving production and profitability. And with the biofuel industry expanding at unprecedented rates, understanding the dynamics of tallow pricing has become essential.
Here’s why tallow pricing is dictating competition in global biofuels, the factors influencing these shifts and how accurate price tracking tools such as Fastmarkets are transforming how businesses trade.
The demand for tallow is surging with the global push for renewable energy and more significant blending mandates. But here’s the catch—tallow supply can’t expand at the same pace.
Key drivers include:
The United States’ renewable diesel capacity has skyrocketed by a staggering 538% since January 2021. Yet, the domestic market can’t keep up with the demand for low carbon intensity (low CI) feedstocks like tallow. The California Low Carbon Fuel Standard (LCFS) incentivizes fuels produced from low CI feedstocks, forcing US buyers to widen their net.
Brazil has become a pivotal player in sourcing additional feedstocks, particularly tallow. By October 2024, Brazil exported 282,791 tonnes, with 94% going to the United States. This dramatic export growth—from just 22,453 tonnes in 2021—highlights how Brazil is fulfilling a market gap the US can’t meet alone.
While Brazil is exporting significant volumes, its own local market competes heavily for tallow. Local biodiesel producers ramp up purchasing during periods of high soybean oil prices. Expanding biodiesel mandates and other industries, like oleochemical producers, prefer tallow’s fatty acid profile, further straining supply. Competition for tallow has intensified globally—and locally.
Gone are the days of weekly negotiations or broadly referencing a Chicago market price. Tallow prices now vary wildly depending on geography, application, and trade agreements.
Prices have been increasingly volatile, particularly as policy shifts generate uncertainty in key markets like the United States. For example, potential policy changes under a new administration could redefine subsidy and blending mandates, directly impacting tallow pricing across global markets.
Meanwhile, in Brazil, tallow’s price competitiveness with soybean oil causes demand to toggle back and forth between various sectors. For international buyers, that’s yet another variable to factor into negotiations and procurement strategies.
The global biofuel market relies heavily on tallow to meet its Low Carbon Fuel Standard (LCFS) targets and keep production costs competitive. But this reliance comes with challenges made worse by opaque or outdated pricing mechanisms.
Fastmarkets is demystifying the tallow market by adding our localized, market-reflective pricing data for Brazil to our comprehensive pricing suite that includes prices for the US. Whether you’re negotiating exports, supplying a biodiesel plant or serving the soap and oleochemical industry, you now have detailed insights into how tallow prices are behaving.
For example:
By leveraging up-to-date, actionable data, stakeholders gain the tools to operate strategically instead of reactively.
US reliance on Brazil’s tallow hit 267,000 tonnes by October 2024, accounting for 94% of Brazil’s total exports.
Domestic Brazilian markets are tightening further due to growing biodiesel mandates and multi-industry use cases, creating fierce market competition.
The next few years will see intense competition among biofuel manufacturers, domestic biodiesel producers and even non-energy industries like oleochemicals and soap production. Success in this competitive arena depends on two things: having the right data and acting on it swiftly.
Fastmarkets is here to help you stay on top of one of the biofuel industry’s most crucial variables. Our newly launched Brazilian tallow pricing data captures localized metrics, providing the clearest view of export markets, domestic trends and sector-specific dynamics.
Don’t trade on guesswork—stay informed. Learn more about our tallow prices.