POINTERS: EU Biodiesel Market: Past, Present & Future

Biodiesel is the most important biofuel in the EU, representing about 70% of the total transport biofuels market. The first biofuel was developed and used in the transport sector in the 1990s. EU biofuels goals set out in directive 2003/30/EC (indicative goals) and in the RED 2009/28/EC (mandatory goals) further pushed the use of biodiesel.

The EU is the world’s leading biodiesel producer with output increasing from 10.18 MMT in 2013 to an estimated 10.35 MMT in 2014; spearheaded by Germany and France, who in total produced an estimated 4.75 MMT in 2014 or 46% of total biodiesel production in the region.

However, market growth for biodiesel has slowed considerably since 2009 as EU policy moves away from supporting biofuels produced from food feedstocks such as rapeseed oil. Domestic biodiesel production peaked in 2010 but has since declined (2011-2013) because of the influx of cheaper biodiesel imports from Argentina and Indonesia.

There are a few other factors that are driving the EU biodiesel sector apart from the current RED mandates. One of them includes the choices of feedstocks. Rapeseed oil is still the dominant feedstock but its share of EU biodiesel production diminished from 63% in 2008 to 55% in 2013. Palm oil has gained its market share since 2009 due to its price competitiveness. Used cooking oil’s market share has also soared as a result of the double-counting measure.

This paper also reviews the challenges that are faced by palm oil, future outlook and strategic recommendations to boost Malaysian palm oil exports in the EU biodiesel sector.

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Questions & Answers (3) :

Azriyah Azian

9 years ago

Thank you for your question Mr. Azharuddin M Amin. Based on the information that I have, I can only deliberate on the steps that should be taken by Malaysian biodiesel producers to expand their market in the EU region. The top priority for Malaysian palm oil industry is to maximise the number of mills with methane capture and develop supply chains for the EU market that process palm oil from these mills. This should be coordinated with the ISCC certification as it is the most widely used scheme for RED and provides access for certified products to the EU market.

Azharuddin M Amin

9 years ago

Dear Ms. Azriyah, based on your explanation, EU they impose some policies and regulations (from on to off farms) to protect their biodiesel industry. What steps should be taken by biodiesel producers, especially Malaysia and Indonesia to expand biodiesel products market share in the world markets.

Hassan Ali

9 years ago

TQ Ms. Azriyah for the interesting presentation. My question to you is that EU has other mandates such as cellulistic mandate, biomass-based biofuel challenging the growth potential for vegetable based biofuel. Do you see those developments a threat for higher vegetable based biofuel uptake in EU in future. You say that EU is reducing its dependence on rapeseed oil for biofuel production. What then is the outlook for EU vegetable based biofuel programme. What feedstock will they depend on to full their biofuel mandate. Is there any specific reason why France and Germany are the main producer of biofuel in EU?

Azriyah Azian:
Thank you for your questions Mr. Hassan Ali. I) Member States are to aim to set a target for the use of cellulosic and waste based biofuels (excluding UCO and tallow). The reference value for this target is 0.5% energy content, but this target will not be binding. These biofuels will count twice towards the national mandate. These cellulosic and waste based feedstocks include palm oil mill effluent, empty palm fruit bunches and crude glycerine. An earlier proposal favoured quadruple counting for cellulosic biofuels, but this has been dropped. Instead, cellulosic and waste-based biofuels are to count double only. Hence, I do not see these developments as a threat to the uptake of vegetable oil-based biofuels. II) One of my slides shows that a total of 18.0 MMT oils and fats projected to be produced by the year 2020. These quantities are more than adequate to meet biodiesel demand, but often food uses tend to be given higher priority. Although there is a projected increase in rapeseed production in the EU, about 60% of rapeseed produced is used for biodiesel production. This leaves a gap in the supply for food and non-food production and palm oil can meet this demand gap. III) The German government has made a strong commitment to increase its use of renewable and green energy by fully supporting the Renewable Energy Directive (RED), driven by the factors of global warming crisis as well as en route to become energy independence as the country was reliant on 90% imported oil previously. Domestically, the Government supports biofuel production and environmental responsibility through legislations by providing tax incentives for biodiesel and set regulatory measures on the mandated percentage of biofuel that must be contained in the fuels for vehicles. Similarly in the local scene, France has been subsidising biofuel crop production as well as biofuel research and development. The country had planned to make mandatory a 10% blend of biofuel in all its fuels by 2020. However, it has capped its maximum target at 7% until further consideration can be given to the food chain and advanced biofuel systems that do not rely on food for feedstock can be developed.
9 years ago