Mexico ponders 2012 biodiesel blend, but needs capacity - consultant

16 September 2010 18:23  [Source: ICIS news]

HOUSTON (ICIS)—Mexico is considering a 5% biodiesel blend in its fuel supply by 2012, but it would need to build new capacity or import significant amounts from the US for the plan to work, a consultant said on Thursday.

If Mexico introduced B5 (5% biodiesel, 95% diesel), the nation's biodiesel demand would be 1.04bn litres, said Shameek Ghosh, global fuels analyst with Jim Jordan & Associates. But Mexico lacks the capacity to reach that total, he said, noting that the country had just three operating biodiesel plants.

Ghosh spoke at the 8th annual Methanol Forum, held in Houston by consultancy firm Jim Jordan & Associates.

Should Mexico increase its capacity, the nation could use jatropha, castor oil and palm oil as feedstocks, Ghosh said.

However, while the nation’s government is considering the measure for environmental benefits, it has yet to put a “real plan in place”, according to the consultant.

“The government has made comments that they’re going to use B5 by 2012, but there’s nothing official,” Ghosh said. “They have a lot of problems on their plate right now.”

Overall, diesel demand represents 22% of the fuels market in Mexico, Ghosh said.

If the nation were to turn to imports, it could be a boon to neighbouring US producers.

Very high production costs and the failure of the US Congress to extend a $1/gal (€0.22/litre) blender tax credit in 2010 have caused some US plants to shut down and have the industry in a fight for its own survival, the consultant said.

“Yes, it would be great for the US biodiesel industry to step in,” Ghosh said. “But I really don’t think [biodiesel] is going to take off in Mexico, at least not anytime soon.”

The Methanol Forum ends on Thursday.

($1 = €0.77)

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By: Ben DuBose
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