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 Last update: July 3, 2008

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 Biofuels

 USEU Reports | MS Reports | Links

 

USEU Reports

bullet Biofuels - Annual 2008 GAIN Report E48063 (June 2008). Good profits in 2005 and 2006 encouraged rapid expansion of biodiesel and bioethanol production capacity in the EU-27. Domestic biodiesel and bioethanol production amounted to about 5.4 MMT for biodiesel and 1.4 MMT for bioethanol in 2007. It is expected to further increase in 2008 to 5.7 MMT and 1.7 MMT, respectively. Overcapacity, high feedstock costs, and competitively priced imports have considerably reduced profit margins. As a result, it is expected that the sector will need to consolidate. Current EU discussions on future biofuel use targets could substantially increase EU-27 vegetable oil demand in coming years. However, discussions on feedstock sustainability criteria could result in sizeable market access issues for U.S. oilseeds and biodiesel. spacer
 
bullet Biomass-to-Liquid Biofuel Plant Opens in Germany GAIN Report GM8020 (April 2008). On April 17, 2008, the world’s reportedly first commercial biomass-to-liquid (BtL) plant opened in Freiberg, Saxony in Eastern Germany. The owner company Choren Industries GmbH projects that it will take 8 to 12 months for the plant to reach its full annual capacity of 18 million liters. The plant will run on forest residue wood and waste timber. While BtL can be produced from cellulosic material, it is distinctly different from cellulosic ethanol, another second generation biofuel.
 
bullet Sweden | Sweden Fights to Import Cheap Ethanol GAIN Report SW8002 (February 2008). On February 4, 2008, the EU approved Sweden's application for permission to continue to import ethanol for processing into biofuels E85 and E95 at a low tariff rate. The decision was good news for about 89,000 Swedish car owners who drive ethanol cars.
 
bullet EU Program for Energy Crops Oversubscribed GAIN Report E47094 (October 2007). The EU energy crop program has been oversubscribed in 2007. Applications for the 45 Euro/ha energy crop premium have reached 2.84 million hectares this year. The Maximum Guaranteed Area is 2 million hectares. The Commission has decided that farmers will receive the original 45 Euro/ ha for just over 70 percent of the land on which they claimed aid. spacer
 
bullet Commission Publishes Impact Assessment of the 10 Percent Biofuel Obligation GAIN Report E47066 (August 2007). The 10 percent obligation for biofuel in the EU by 2020 to be incorporated in total transport fuel is expected to consume production from 15 percent of the utilized agricultural area on the assumption that 30 percent of biofuel production would be from second generation biofuel and 20 percent of the supply would be imported, according to an analysis from the European Commission. Prices on cereals and oilseeds are expected to increase due to the demand for feedstock. The largest price increase is expected for oilseeds, mainly sunflower seed.
 
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Biofuels: Annual GAIN Report E47051 (June 2007). In January 2007 the European Commission proposed to introduce a 10 percent binding target for biofuels in transport by 2020. Under the earlier EU Biofuels directive, the indicative targets for 2006 have not yet been reached. The EU biofuel industry has been developing very rapidly. Production of biodiesel in 2005 was 2,879,700 MT, and is expected to reach 8,100,000 MT in 2007. The production of bioethanol has also been increasing, from 830,976 MT in 2005 to reach an expected level of 3,690,150 MT in 2008. spacer
 
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Oilseeds and Products GAIN Report E36149 (January 2007): Oilseed production in the EU25 is reaching new record levels. 2006/07 rapeseed production is expected to reach 15.75 million MT, while sunflowerseed production should reach 4.14 million MT. Continued low crush margin for soybeans relative to rapeseed is encouraging crushers to turn to multiseed crushings. This change is most pronounced in northern Europe where production of rapeseed is dominant, and where demand for rapeseed oil for biodiesel is increasing. With growing demand for vegetable oils, imports of rapeseed oil from the US and Canada, and soyoil from Brazil have been particularly significant.
 
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EU Energy Crop Premium to be Extended to all Member States GAIN Report E36129 (Oct. 2006): The European Commission has proposed to extend the energy crop premium Carbon Credits to all New Member States (NMS) starting 2007. Currently 8 of the 10 NMS are excluded
from this aid since they have chosen to apply the Single Area Payment Scheme (SAPS). The Commission also proposes to increase the minimum guaranteed area (MGA) from 1.5 million ha to 2.0 million ha.
In 2004 the total area for Carbon Credits was around 300,000 ha; the area increased to 1.2- 1.3 million ha in 2006. It is possible that there will be a large interest for Carbon Credits in the NMS since the 45 Euro premium would be relatively high compared to the EU support they currently receive as direct payments.
 
bullet The Economics of Bioethanol Production in the EU  GAIN Report E36081 (May2006): This report explores demand, supply, and production of bioethanol from sugar beets and wheat in the EU. Sugar beets prove to be a good feedstock for European bioethanol production. Because sugar beets have a much larger yield per hectare than wheat, the EU currently produces 2 million more tons of sugar beet than wheat on 20 million less hectares of land. Additionally, sugar beets produce more ethanol per hectare: a hectare of sugar beets can produce 30 hectoliters more ethanol, on average, than wheat. Also, sugar beet ethanol is shown to have a more energy-efficient production process than wheat ethanol and promises greater greenhouse gas reductions. This is the first in a series of reports about ethanol production in the EU.
 
bullet Import Duties for Biofuels GAIN Report E36056 (April 2006): Data on imports of biofuels into the European Union are difficult to obtain since there is no strictly defined HS code on either bioethanol or biodiesel. The most common HS codes for biofuel imports into the EU are 2207 for bioethanol and 3824 for biodiesel. Each has different import duties. There are also special agreements with countries that are part of the GSP program. spacer
 
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 Outlook for EU Oilseeds and Biofuels GAIN Report E35172 (September 2005):While improving productivity will continue to boost EU oilseed production, strong demand for biofuels could curb growth in EU oilseed export. Mid-term projections recently published by the European Commission (EC) assume that EU biodiesel and bioethanol production capacity will remain more or less constant at current levels over the next six years. This assumption appears to be partly driven by the forecasted availability of EU rapeseed (canola), which is the main source of EU biodiesel. However, with increasing of fuel costs, more competitive oilseed import prices could propel biofuel demand beyond current expectations. Biodiesel production capacity has already increased by an estimated 35 percent since 2002, reaching close to 2.2 million tons a year. Germany, France and Italy are the main EU producers of biodiesel.
 
bullet Imports of Genetically Modified Rapeseed and Rapeseed Oil for Biodiesel GAIN Report E35204 (October 2005): Imports of Genetically Modified (GM) organisms and products of GM organisms are strictly regulated in the European Union (EU). However, the biotech regulations for food and feed do not apply for products used for direct technical use, such as biofuels.
 
bullet Pakistan, the second largest ethanol exporter to the EU, loses privileged status GAIN Report E35187 (September 2005): Although Pakistan still benefits from a 15 percent tariff reduction, Pakistani ethanol does not appear to be competitive in the European market.  There has also been a complaint about Pakistani ethanol being dumped on the European market.  This complaint was launched by the Committee of Industrial Ethanol Producers.
 
bullet Conditions for importing biodiesel to the EU from the U.S. GAIN Report E35101 (June 2005): The European Commission wishes to increase the market share of renewable biofuels in the transport sector. This report contains information on importing biodiesel from the U.S. to the EU.
 

 

Member State Reports

bullet Sweden Plans to Abolish Ethanol Duty GAIN Report SW7014 (September 2007). The Swedish Prime Minister, Fredrik Reinfeldt, revealed on September 11, 2007 that the Swedish government intends to abolish the protective duty on ethanol that was introduced in Sweden in January 2006. The move is expected to take effect on January 1, 2009 at the latest. However, the measure first needs to be approved by the European Union.
 
bullet Spain | Update GAIN Report SP7024 (August 2007). The Spanish Congress recently approved a regulation establishing mandatory renewable fuels blending requirements beginning in 2009. In December of 2006, the Spanish Ministry of Industry announced plans to promulgate a new regulation that would have made a two percent biofuels blend mandatory in calendar year 2007. The delayed requirement (from that anticipated for 2007) will slow and may even eliminate some biofuels production plant development. This report should be read as an adjunct to report E47051, which describes the overall European Union (EU) biofuels situation.
 
bullet Biofuels Without Subsidies? GAIN Report SP7011(August 2007). Can Europe meet its currently voluntary "renewable" fuels-use targets using Europe-produced renewable fuels from locally produced feedstock? Without European Commission intervention, when the vagaries of very complex local and world commodity markets turn against European renewable fuels producers, local producers may become hard pressed to remain financially viable (please read below).
 
bullet Poland | Biofuel Update GAIN Report PL7044 (August 2007). The Polish government recently announced additional announced additional financial incentives for the biofuel industry, that are expected to stimulate biofuel production that has lagged expectations, since the government first announced incentives earlier in the year. The government also established mandatory use goals that meet EU recommendations.
 
bullet Hungary Annual report GAIN Report HU7007 (July 2007).On November 27, 2006 the Hungarian Parliament approved the country's "coexistence regulation" (Amendment of the Act on Gene Technology Activities). With the new regulation Hungary imposed a "de facto" ban on biotech production due to neighbor consent requirements and excessive isolation distances. However, biotech opponents and advocates alike stress the country's need for biotechnology research. On February 20th, 2007 the EU environmental ministers voted down the European Commission's proposal for Hungary to repeal its prohibition on the use and sale of biotech corn "MON 810". The Hungarian Environmental Minister stressed that the decision was not against the production of genetically modified plants. However, he emphasized that Hungary wants to maintain safeguard measures until solid studies on the environmental effects are available. Hungary's biotechnology policy for feed corn production, corn seed production, and soybean product (soybean meal) imports negatively impacts U.S. exports to Hungary. Field corn and seed corn production (about one fifth of the EU's corn crop) is dominated by American varieties.spacer
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bullet Germany | Cheap Biodiesel Imports Could Potentially Impact German Rapeseed Oil Trade GAIN Report GM7024 (June 2007). German biodiesel producers claim that it is more economical to sell rapeseed oil to the U.S. and import B99 than produce biodiesel from the same rapeseed oil domestically. The current market conditions have resulted in the first German biodiesel companies giving up production at least temporarily. If cheap biodiesel imports make domestic German biodiesel production uneconomical, roughly 2.4 million MT of rapeseed oil will have to be used differently and Germany could well become a net exporter of rapeseed oil again.
 
bullet Bio-Fuels Conference in Budapest GAIN Report HU7005 (April 2007). On March 29, 2007 a consortium of the European Biopower Llc., TGG & Partners Llc. and M.I.O. Association arranged the “Central Eastern European Bio-Fuels Sustainable Day” conference in Budapest. The conference focused on bio-ethanol. About 300 experts from Hungary and 14 other countries attended the event. The conference was divided into four parts: 1) European Union and national strategies: General introduction of the European Union Energy Policy; 2) Bio-fuels: The Agricultural Perspectives; 3) The Technology: Possible production methods and utilization techniques of renewable resources with special focus on bio-fuels; and 4) A roundtable discussion with conference speakers. At the end of the conference a group of participants established the Hungarian Bio-ethanol Association with the aim of integrating the producers, traders, users and developers of this kind of bio-fuel in order to lobby for their particular interests.
 
bullet Lithuania | Biofuel and Biomass, Production and Plans GAIN Report LH7001 (April 2007). Lithuania is a major producer and user of biomass for thermal and electricity production. It currently has moderate production of biodiesel (methyl-ester) and ethanol but has ambitious plans to increase production of biofuels to 380,000 tons by 2010.
 
bullet Italy | Biofuels GAIN Report IT7009 (April 2007). Italy has the legal framework in place to encourage biodiesel and bioethanol production, and some production is taking place. Domestic supplies of raw materials for biofuel production, however, are limited.

 

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Finnish Companies Join Forces in Biofuel Development GAIN Report FI7002 (March 2007). Neste Oil, the developer of the NExBTL second-generation biofuel process and Stora Enso, a paper, packaging and forest products company, are joining forces to develop technology for producing new-generation biofuels from wood residues.

 
bullet Dutch company announces plans for producing second generation biofuels GAIN Report NL7005 (March 2007). The Dutch company Royal Nedalco announced plans to build a second-generation biofuel plant with an annual production capacity of 200 million liters of bioethanol.
 
bullet Biofuel Activity in Greece GAIN Report GR7003 (February 2007):  The Government of Greece (GOG) is aiming to produce 160 million liters (ML) of biodiesel and 400 ML of bioethanol annually by 2010. For a broader discussion of EU biofuel production and plans, please refer to reporting out of FAS Brussels.
 
bullet Bio-Fuels Annual GAIN Report SW6013 (March 2007): Sweden is firmly in the forefront with regard to bio-fuel utilization within the transportation sector. This is due in large part to measures taken by the Government of Sweden to promote the utilization of bio-fuels and other renewable fuels, mainly through tax incentives.
 
bullet Biofuels Without Subsidies? GAIN Report SP7012  (February 2007):  Can Europe meet its currently voluntary "renewable" fuels-use targets using Europe-produced renewable fuels from locally produced feedstock? Without European Commission intervention, when the vagaries of very complex local and world commodity markets turn against European renewable fuels producers, local producers may become hard pressed to remain financially viable .
 
bullet Impacts on Oilseed Industry following Biofuel Boom GAIN Report FR7009 (February 2007): Non-food oilseed acreage (rapeseed and sunflower seed) is expected to increase from 370,000 ha in 2005 to 1.6 million by 2010 due to increased demand from biofuel production. As a result, increased supply of oilseed by-products, rape meal and glycerin, is causing some changes in France. Domestic demand for rape meal in cattle and swine feed has the potential to double from 1.5 to 3 million MT. Glycerin's over-supply and low world price is causing the industry to find new markets to boost demand.
 
bullet Portugal's Biofuels Policy GAIN Report PO7001 (January 2007): The Government of Portugal (GOP) has now drafted and implemented biofuels legislation, and the Portuguese refining industry is now investing, setting the stage for a substantial increase in biofuels production capacity within Portugal. The GOP forecasts that by 2010, biofuels production capacity will be at about 600,000 tons, up considerably from 2006 production of about 60,000. spacer
 
bullet New Tax Regulation for Biofuels GAIN Report PL7003 (January 2007): A reduction in Poland's tax exemptions for biofuels has lessened enthusiasm for future production and use, especially for biodiesel, at least in the near term.
 
bullet French Biofuel Production Plans GAIN Report FR7001 (January 2007): In order to increase the biofuel-to-fuel blend to 10 percent by 2015, the GOF recently increased its biofuel production quotas that will benefit from tax rebates. Quota allocation is heavily weighted to biodiesel products since transportation demands for diesel fuel predominate and are growing. Acreage dedicated to biodiesel production, primarily rapeseed, is expected to double by 2010. Bioethanol production is projected to be sourced from 300,000 ha of wheat, 50,000 ha of corn and 50,000 ha of sugarbeets by 2008.
 
bullet Barley vs. Wheat Use for Ethanol Production GAIN Report SP6034 (January 2007): One of Spain’s major ethanol producers recently announced a change in sourcing feedstock for its ethanol production plants. The announcement could have implications for already-lagging exports of North American high-quality wheat.
 
bullet Iberian Peninsula Biofuels-- An Update of SP5019 GAIN Report SP6035 (January 2007): While the Government of Spain studies mandatory requirements for renewable fuels use, because Spain has not met the European Union voluntary renewable fuels use targets, private sector investment in new renewable fuels plants has increased considerably. This report is an attempt to identify the magnitude of the upcoming increase in production capacity.spacer
 
bullet Spain—Mandatory Renewable Fuel-Use Targets?  GAIN Report SP6033 (January 2007):  The Government of Spain will consider mandatory targets for renewable fuels use as currently voluntary renewable fuels-use targets appear to be insufficient to overcome economic obstacles for renewable fuels in the current marketplace.spacer
 
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Biofuels Market in Bulgaria GAIN Report BU6006 (Oct. 2006): The biofuels market in Bulgaria is just getting off the ground. Biodiesel and bioethanol are currently produced in small quantities although a number of facilities are being constructed. Local biofuel production should reach 350,000 MT in the next two years. The Government of Bulgaria is in the process of drafting the necessary EU-harmonized legislation with the goal of establishing a regulatory framework by end-2006. The biofuel industry, however, faces challenges related to Government concerns over reduced budget revenue, and a still-significant gray market in oil and distilled spirits.
 
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 Bio-fuel Legislative Update GAIN Report PL6068 (Oct. 2006):   In August 2006, Poland passed its general law on bio-fuel as well as a related law that identifies the specific government agencies to oversee bio-fuel production and use. The laws have been signed by the President and will become effective on January 1, 2007. Poland developed these laws in response to EU directives aimed at encouraging bio-fuel use in member states. Experts believe that Poland will be able to meet the EU goal of 5.75 percent bio-fuel in all fuel used for transportation by 2010. spacer
 
bullet UK Parliamentary Committee Report on Role of Bioenergy GAIN Report UK6031 (Sept. 2006): Highlight: The UK Parliamentary Committee on Environment, Food and Rural Affairs (EFRA) has just completed its report regarding the potential role of bioenergy in meeting UK climate change targets. The UK government has set a goal to reach 5 percent inclusion of biofuel in road transport fuel by 2010/11. EFRA has now released its report “Climate change: The role of bioenergy”.
 
bullet New Biofuel Legislation Expected in Poland GAIN report PL6051 (Aug. 2006): The Government of Poland (GoP) approved a new legislative proposal for bio-fuel production, use and control. According the proposed legislation, farmers will be able to produce bio-fuels for their own use. There is significant industry interest in investing in bio-fuel production. The legislation is expected to become effective in early 2007, and will have a significant influence on farmers' planting decisions for MY2008/09.
 
bullet Scientists Discuss Rapeseed Prospects in Poland  GAIN Report PL6044 (July 2006): Rapeseed production in Poland may increase in response to new, expected legislation on bio-fuels. However, the scale of expansion will likely be rather limited. Current concerns about biotechnology may limit chances that it will help with rapeseed production in the near future. spacer
 
bullet Energy Crops May Transform British Landscape  GAIN Report UK6025 (July 2006): The UK government has set targets to achieve 20 percent of electricity generation from renewable energy sources by 2020, and to have 5 percent of the country’s needs for automobile fuel met with biofuels by 2010. To meet these targets, it is estimated that 7 percent of the UK’s land will be dedicated to energy crops such as willow, and that an increase of about 1 million hectares of oilseed rape will be required.
 
bullet Biofuels Situation and Policy in Hungary GAIN Report HU6005 (May2006):  Hungary is exploring the viability of biofuel production and utilization, but commercial production was still low in 2005. The Government of Hungary established incentives, as well as technical guidelines for increasing biofuel use through recent tax law changes. Hungary may be a potential producer of bio-ethanol while the prospects for biodiesel material (rapeseed) production are limited. In terms of utilization, the Government supports blending rather than the pure use of biofuels.
 
bullet Nordic/Baltic Biofuels Report GAIN Report SW6012 (April 2006):  Finland and Sweden are both among the leading countries in the world in utilization of renewable resources for energy production. In September 2005, Sweden's Prime Minister Goran Persson announced a new policy target to create the conditions necessary to break Sweden's dependence on fossel fuels by 2020. Thanks to abundant forest resources, Sweden and Finland have well-developed energy systems for wood. In 2004, biofuel's share of total energy consumption was 20% in Finland and 17% in Sweden.
 
bullet Biofuels Situation in the Netherlands GAIN Report NL6005 (February 2006): It is anticipated that The Netherlands and Belgium will largely depend on imports in order to fulfill the ambitious government goals for the production and consumption of biofuels. Dutch ports already import large volumes of fuel wood, palm derivatives and ethanol destined to be used as biofuel. Opportunities for U.S. exports lay in the supply of fuel wood, soybean oil and other vegetable oils and grains.spacer
 
bullet French Biofuel Production Booms GAIN Report FR6005 (January 2006): France has adopted more ambitious objectives than the European Commission's for biofuel incorporation into conventional fuels. As such, they have offered biofuel producers financial incentives for production of 517,500 MT in 2005 up to 3.2 million MT in 2008. French rapeseed production is expected to increase substantially and by-product rape meal will partially replace imported soybean meal in feed rations. France may need to diversify some sources of biofuel products due to production constraints, which may lead to export opportunities for low-cost producers of suitable oilseeds and products.
 
bullet Pakistan, the second largest ethanol exporter to the EU, loses privileged status GAIN Report E35187 (September 2005): Although Pakistan still benefits from a 15 percent tariff reduction, Pakistani ethanol does not appear to be competitive in the European market.  There has also been a complaint about Pakistani ethanol being dumped on the European market.  This complaint was launched by the Committee of Industrial Ethanol Producers.

 

Links

bullet New and Renewable Energies (Directorate-General for Energy and Transport. European Commission)
bullet Biomass Action Plan (European Commission)
bullet Bioenergy Agriculture Research (European Commission)
 

 

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