| European biofuels market exceeded euros 1.88 billion in 2005 |
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| Wednesday, 31 May 2006 | |
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The European biofuels market in 2005 generated in excess of euro1.88 billion, according to the European Commission.
EU Directives have been introduced that require countries to include a specified per
cent of biofuels in fossil fuels by 2010.
As part of the Kyoto Protocol, the European Union agreed to reduce CO2 emissions
by 8% by the end of 2012. The life cycle analysis (LCA) approach to the overall
atmospheric CO2 contribution of a fuel suggests that biofuels, both biodiesel and
bioethanol, produce about 50% less CO2 than mineral diesel.
Based on their low emission rates, the European Commission is supporting the
development of the biofuels market as an important contribution to meeting their
overall emission targets.
Directives 2003/30/EC and 2003/96/EC aim specifically to encourage the increased
use of biofuels and set indicative targets for their use in the transport industry.
In addition to such strong legislative backing, the multiple benefits offered by
biofuels bode well for market expansion.
For instance, biodiesel, bioethanol and Bio-ETBE (ethyl tertiary butyl ether) can
all be handled and distributed from the refinery using existing network systems
and standard fuel pump equipment. The lack of technology barriers or the need
for specialist equipment for handling gives biodiesel a distinct advantage over
other alternative fuels.
Another advantage is that existing fuel specifications allow the blending of
bioethanol and ETBE in gasoline. This is set to promote the emerging bioethanol
market as customers can use this blend without fear of invalidating engine
warranties.
Another factor driving the bioethanol market is fuel versatility. Flexi-fuel vehicles
provide end users with more choice in the fuel purchased - an important
consideration should adverse economics on the price of a particular fuel
start to occur.
Mineral diesel manufacturers are interested in blending biodiesel in their products
to lower the sulphur emissions after combustion, as emissions from biodiesel
are negligible. Biodiesel also improves the lubrication properties of the fuel
and reduces wear on the engine.As demand for biofuels surges, securing adequate
feedstock supply to meet such demand is likely to present a key challenge.
Already, pressure on rapeseed, the feedstock for the biodiesel industry, is being
witnessed and competition between the food industry and biodiesel producers is
likely to push prices up in the future.
To relax pressure on rapeseed oil, biodiesel producers have begun sourcing
alternative feedstocks, such as Malaysian palm oil and tallow.
'Biofuels are likely to play an increasingly important role in the transport fuels
mix as governments try to limit carbon dioxide (CO2) emissions,' says
Frost and Sullivan research analyst Robert Outram.
David Smith, Singapore
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