New EU greenhouse gas (GHG) calculation methodology for biodiesel has sent producers scrambling to update their emissions data and caused uncertainty in the marketplace.
According to the new rules, which came into force on 1 September, all biodiesel that contains methanol in its supply chain must carry with it calculations of the GHG saving associated with the fuel, Platts reported.
The new rules would have a significant impact in countries such as Germany, where biofuel mandates were calculated based on GHG savings instead of blending volumes.
More biodiesel would need to be blended in such situations to reach the required GHG saving mandate, which would make other biofuels more competitive when comparing their price-GHG saving ratio.
Demand for biodiesel was expected to rise all over Europe, leading to some issues in the marketplace around term contracts that had been negotiated based on the current GHG saving rules.
Demand for high-GHG saving used cooking oil methyl ester (UCOME) product was projected to increase sharply as it was becoming “increasingly valuable” in the face of the falling GHG saving calculations, Platts wrote.