Brazilian ethanol market down while US market moves lot
Brazilian Ethanol prices are forecast to move down in 2026. Prices for dehydrated ethanol were at $635-665/kl for prompt loading on an FOB basis as of end-November 2025, which advanced about 20% from early 2025. 30% ethanol blend gasoline (E30) was introduced in Brazil in August 2025 and demand was firm. Also, sugarcane was preferentially used to produce sugar rather than ethanol. As a result, supply/demand tightened and ethanol prices continued rising in the second half of the year. However, due to high prices, sugar producers in Brazil are wary that demand would shift to the US and Pakistan and are swinging to produce more ethanol. Ethanol prices are forecast to decline for April loading onward, when the harvest of sugarcane starts.

On the other hand, US ethanol prices were at around $470-500/kl as of end-November. But the market would likely move upward and downward in 2026. While there are sufficient feedstocks as the harvest of corn was plentiful in 2025, the downside would be limited due to healthy export demand. Further, demand for US Renewable Identification Number (RIN), which is traded along with ethanol, is expected to grow as mandatory volumes of the RIN will be raised in 2026. This would boost the US ethanol market.

More UCO players might get ISCC
In the used cooking oil (UCO) market in 2025, Cosmo Oil began to produce hydrogenated esters and fatty acids (HEFA), sustainable aviation fuel（SAF）produced from UCO, at its Sakai refinery. In Japan, UCO started to be used for feedstocks in earnest. In 2026, new facilities are not scheduled to start up. But South Korea would make it obligatory to mix SAF by 1% in 2027 and Taiyo Oil in Japan is considering producing biodiesel at its Yamaguchi plant in 2028 at the earliest. 2026 would be a year to prepare for the new projects.

More non-Japanese players are procuring UCO from Japan and the acquisition of the ISCC is forecast to increase among UCO collectors. According to market sources, only a few companies had ISCC authorization a few years ago but the number rose to double digits. But since the price difference between unauthorized and authorized UCO is not that wide at present, there is little merit in getting the authorization, considering time and money required.