Demand for used cooking oil methyl ester (UCOME) for biodiesel in Europe has fallen from previous years due to the higher greenhouse gas (GHG) savings from first generation biofuels, according to Platts.
The commodity news desk wrote on 2 June that biofuel tickets had been carried over from 2016 across Europe, particularly in Germany, which had resulted in lower demand for UCOME biodiesel.
Germany’s biofuels mandate was based on GHG savings, not volume, so the increased GHG savings of traditional biofuels had take a bite out of the UCOME market.
According to the German Union for the Promotion of Oil and Plant Proteins (UFOP), average GHG savings for biodiesel had risen from 50.5% in 2014 to 71.5% in 2016. Ethanol’s GHG savings had followed a similar trajectory, reaching 70% in 2016.
An unnamed source told Platts that there had been some UCOME imports from China, but demand in Germany had been undercut by ethanol, and due to the stronger euro and “volatile” gasoil prices, the market had “gone quiet”.
While UCOME held a double-counted status in many European countries, allowing end-users to count it twice towards fulfilling their renewable fuels mandate, Germany was an exception.
Additionally, in the summer months, producers were keener to produce fatty acid methyl ester (FAME). Increasing stocks of FAME and imports of palm methyl ester meant biodiesel stocks were set to rise, Platts wrote.