Material Insights · Understanding the Material World

Biodiesel (FAME) and Glycerine

Every tonne of FAME biodiesel releases about a tenth of a tonne of crude glycerine, so glycerine supply is set by biodiesel mandates rather than by glycerine demand. When biodiesel grows faster than uses for glycerine, the by-product floods the market; a shift to hydrotreated renewable diesel, which yields propane instead, would cut that supply.

Biodiesel (FAME) (chemical) and Glycerine (chemical): 3 relationships.

How they are linked

1. By-product

Joint production · Strong · Biodiesel yields glycerine

Transesterification splits each fat or oil molecule into three methyl esters, which are the biodiesel, and one glycerol backbone, which separates out as crude glycerine.

  • about 10% crude glycerol by weight of biodiesel output
  • about 62% of world crude glycerine supply from biodiesel, 2018 forecast

Most of the rest comes from splitting fats for fatty acids (about 29% in 2018), with fatty alcohols and soap making up the remainder. Crude glycerine from biodiesel carries methanol, water, salts and soap and must be purified before it can be sold as refined glycerine, so its value depends on access to refining capacity.

Sources: Systems Microbiology and Biomanufacturing (Chilakamarry et al.); Vantage, ICIS conference presentation

2. Supply glut and price swings

Cost and price · Asymmetric · Biodiesel output sets glycerine supply

Biodiesel plants make glycerine whatever its price, so supply follows fuel mandates and margins, while glycerine demand in food, personal care, medicines and chemicals grows slowly.

  • about 3.8 Mt world crude glycerine supply, 2018 forecast

The biodiesel boom of the mid 2000s caused a glycerine glut and a steep price fall, which prompted research into turning crude glycerol into chemicals. Mandate increases still add supply regardless of demand: Indonesia raised its biodiesel blend from B35 to B40 in 2025, which raises its crude glycerine output.

Sources: Systems Microbiology and Biomanufacturing (Chilakamarry et al.); Vantage, ICIS conference presentation; Johnson and Taconi, via IGERT; The Jakarta Post

3. Shift to renewable diesel

Transition · Rising · Less FAME means less glycerine

Hydrotreated vegetable oil uses the same fats but strips out oxygen with hydrogen, turning the glycerol backbone into propane instead of glycerine.

Where policy favours renewable diesel and sustainable aviation fuel over FAME, the same fat supply produces less glycerine. That can tighten glycerine markets over time even if total biofuel output rises.

Sources: European Technology and Innovation Platform Bioenergy

For investors

Key learnings

  1. Glycerine supply is set by biodiesel mandates, at about 10% of FAME output by weight, not by glycerine prices.
  2. Biodiesel supplied about 62% of world crude glycerine in 2018, so crude glycerine prices depend on fuel mandates and on refining capacity to upgrade it.
  3. Growth of renewable diesel at the expense of FAME removes glycerine supply, which could favour glycerine refiners and users over time.

What to track

  • Indonesian and Brazilian biodiesel blend mandates: Higher blends mean more crude glycerine supply (As announced · energy ministries)
  • Crude to refined glycerine price spread: A wide spread rewards refiners and signals surplus crude (Monthly · trade press)
  • China crude glycerine imports: Falling imports signal a glut in exporting countries such as Indonesia (Monthly · China customs)

For policymakers

Key learnings

  1. Biodiesel mandates create a by-product market that policy rarely plans for; refining capacity decides whether it is a resource or a waste.
  2. Favouring hydrotreated fuels over FAME changes the by-product from glycerine to propane, with effects on oleochemical users.
  3. Countries with biodiesel programmes can capture more value by refining glycerine at home rather than exporting it crude.

What to track

  • Biodiesel output: Sets the volume of crude glycerine to be absorbed (Monthly · national energy statistics)
  • Crude glycerine exports and imports: Shows whether the by-product is refined at home (Monthly · trade data)

Sources

  1. Glycerol waste to value added products and its potential applications, Systems Microbiology and Biomanufacturing (Chilakamarry et al.) (2021)
  2. 2018 Glycerine Structural Shift (ICIS Pan American Conference; data from LMC, IHS, Oleoline), Vantage, ICIS conference presentation (2018)
  3. The glycerin glut: options for the value-added conversion of crude glycerol resulting from biodiesel production (Environmental Progress 26(4)), Johnson and Taconi, via IGERT (2007)
  4. Analysis: RI to implement B40 biodiesel mandate in 2025, The Jakarta Post (2025)
  5. Hydrotreated vegetable oil (HVO) factsheet, European Technology and Innovation Platform Bioenergy (2020)