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The $1.00 per gallon biodiesel mixture tax credit was reinstated in a December 2019 spending bill, applying to biodiesel and renewable diesel through 2022 and retroactively to 2018 and 2019. The credit offsets the higher cost of biomass-based diesel relative to petroleum diesel.
The tax credit makes biodiesel and renewable diesel more competitive, supporting blending and soybean oil demand through 2022. This is a meaningful policy support for vegoil prices.
mansfield.energyAshley FisherFeb 5, 2020After 842 past bullish policy events, Soybean Oil moved a median +0.2% over 5 sessions (52% higher; middle half -1.6% to +2.1%), and -0.5% over 20.
After 27 past neutral policy events, ULSD / Diesel moved a median -1.4% over 5 sessions (41% higher; middle half -4.3% to +2.6%), and -4.6% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
