The COVID-19 pandemic will cut EU bioethanol and biodiesel use by around 10% and 6% respectively according to a new United States Department of Agriculture (USDA) report, Biofuels Digest reported on 23 July.
According to the USDA Global Agricultural Information Network (GAIN) Biofuels Annual report published on 29 June, the drop in EU biodiesel consumption was due to COVID-19 restrictions on movement, economic recession, and the resulting reductions in diesel use.
Biofuel demand in the EU was driven by the Renewable Energy Directives I and II, the former demanding 10% renewable content in transportation by 2020 and the latter having a binding target of 3.5% for the use of advanced biofuels by 2030.
In 2020, blending of advanced biofuels was projected to reach 1.5%, the majority of which was produced from waste fats and oils.
Before the COVID-19 outbreak, consumption of both biodiesel and bioethanol had increased in the EU, the report said.
Reduced demand for biofuels during the pandemic had been driven by falling demand for on-road transport rather than reductions in blending mandates, which were generally holding across Europe according to the report.
Diesel/biodiesel demand had been impacted less by the lockdown measures than gasoline-ethanol demand as the decline in heavy-duty commercial vehicle use had been less severe than declines in light-duty passenger use of diesel.
The sharpest drop in biodiesel consumption by volume was forecast for France, Spain, Germany, the UK and Belgium while the biggest reductions in percentage terms were forecast for Belgium, Spain, Portugal, Ireland and France.
In contrast, biodiesel consumption was forecast to increase in the Netherlands, Sweden, Hungary, and the Czech Republic, as their mandate increases were high enough to compensate for the COVID-19 related percentage reduction in consumption anticipated for the entire fuel pool.
Biodiesel consumption was forecast to remain flat in Austria, Bulgaria, Denmark, Croatia, Latvia,
Lithuania, and Slovenia.
In 2019, EU biodiesel consumption was estimated to have increased by 6% as a result of mandate
increases in Croatia, Finland, Hungary, Ireland, Italy, the Netherlands, Poland, Slovakia, and the UK. At the same time, consumption had decreased in Greece, Belgium, Germany, and the Slovak Republic, the USDA report said.
The reduction in Germany was the result of a mandate designed to lower carbon emissions for
all marketed transport biofuels rather than raise biofuel use on a volumetric or energy basis. This
resulted in higher consumption of biodiesel with higher greenhouse gas (GHG) reduction values, leading to reduced physical demand.
In 2019, France, Germany, Spain, Sweden, and the UK were the largest biodiesel consumers in the EU, accounting for 62% of the total EU biodiesel consumption.
Projections for 2020 indicated that Sweden and Spain could change places and Italy was expected to replace the UK in the top five.
After a decline in 2018 (due to high competition from cheaper imports), EU biodiesel production
had recovered in 2019, helped by the imposition of countervailing duties on biodiesel from Argentina as well as an increase in domestic consumption which was higher than the increase in imports from other suppliers.
EU HVO (hydrogenated vegetable oil) production had increased by 15% as new plants in France and Italy entered commercial production in April and August 2019, respectively.
With production continuing to shift from FAME (fatty acid methyl ester) to HVO, biodiesel production was expected to decrease by 4% in 2020, while HVO production was forecast to increase by 14%, according to the report.
The EU was the world’s largest biodiesel producer and represented about 85% of the total transport biofuels market, the USDA report said.