In Texas, Argus has launched daily prices for renewable diesel in California, complementing its existing suite of renewable diesel prices, which spans Asia, Europe and the US west coast.
Renewable diesel, also known as hydrotreated vegetable oil (HVO), is chemically identical to conventional road diesel and can be used as a “drop-in” fuel to replace fossil fuel diesel, with no blending limits.
The four new Argus prices for California are assessed by collecting bids, offers and transactions at Kinder Morgan’s Los Angeles and San Francisco pipeline gathering systems from a range of market participants. The prices are for at least 5,000 barrel batches shipping any time during a named month, with differentials assessed against Nymex ultra low sulphur diesel (ULSD) futures and California Air Resources Board ULSD plus costs levied on the diesel fuel position holder at the terminal.
The renewable diesel market has grown exponentially in the past few years and was responsible for 54% of all Californian diesel consumption in the second quarter of 2023, crowding out biodiesel and conventional fossil fuel-based supplies.
