02 January 2008 02:45 [Source: ICIS news]
By Anu Agarwal
SINGAPORE (ICIS news)--High feedstock costs and the need for governmental and environmental support will be key concerns for the Asian biofuel markets in coming year, regional ethanol and biodiesel traders said on Wednesday.
Biodiesel production has become increasingly unviable amid surging feedstock crude palm oil (CPO) costs and is unlikely to change in the coming year, biodiesel producers based in ?xml:namespace>
With costs rising faster than biodiesel prices in the key European market, regional producers are struggling to survive. Most biodiesel facilities in the region have either shut in the face of such hardship or have been operating at low rates during the second half.
CPO prices have risen 52% since March this year while palm biodiesel prices rose only 28%.
The only hope for these units would be if Asian governments chose to support biodiesel, especially countries like
The other biofuel, ethanol, has also been only partly successful in
However, food security concerns in
Asian ethanol market has become supply driven as demand for the biofuel is not rising significantly, said Henri Bardon of the global ethanol trading firm Vertical.
Biodiesel is a premium product for diesel blending but ethanol is an economical substitute for oxygenates in gasoline and yet the urgency to use it has not been seen in
Current fuel ethanol prices of around $650-700/tonne CFR (cost and freight) Asia are lower than oxygenates like MTBE which are hovering at $900/tonne FOB (free on board) SE Asia.
The country has provided tax incentives and support for using 10% ethanol blend called gasohol. A program to use 20% ethanol blend has been approved for 2008, said sources from PTT and Bangchak, the county’s refiners and blenders.
If the additional blending in
The other big gasoline markets like
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