February 11, 2013

EU biofuel and oilseed prospects

Here is a good brief updates on the current European biofuels situation from the NNFCC, a UK bio-based economy consultancy.

 Like in the US, Europe's biofuel industry is also mired with constant uncertain legislation especially about the European Renewable Energy Directive (RED), which originally stipulates that there should be 10% biofuels used in transport fuels by 2020.

However, late last year, the European Commission wants to cap the contribution of food crop-based biofuels towards this target at 5%, which could greatly affect the first-generation biofuel market. According to the NNFCC, this new requirement will make it more difficult for crop-derived biodiesel to meet default values and could rule out crops like rapeseed for feedstock.

Non-food crop-based biofuels such as those using tallow fats, used cooking oil as well as algae, straw, sewage or manure will get more incentives. However, the biofuel industry in Europe is not sure whether these new RED targets can be fulfilled without first-generation biofuels since there is little commercial production of second generation biofuels in Europe.

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