23 December 2011 09:04 [Source: ICIS news]
By Wong Lei Lei
According to a major exporter, the demand for biodiesel is likely to increase because of the Renewable Energy Directive (RED) in the EU, which mandates the usage of renewable energy within the region.
The RED requires its member countries to consume 20% of total energy from renewable sources by 2020.
In addition, the policy states that each member state must ensure that 10% of total road transport fuel comes from renewable energy by the same year.
The RED requires all biofuels imported into the EU to pass a minimum 35% greenhouse gas emission savings criteria.
Various producers in
Most market players are expecting feedstock CPO prices to rise in the first half of next year because of the onset of heavier rain caused by La Nina in southeast Asia, which may potentially increase the premium of PME over gasoil to unattractive levels.
The demand for PME remains weak in the fourth quarter of 2011 and this is likely to continue into the first two months of 2012 as the palm-based biofuel has a high cold filter plug point (CFPP) compared with other vegetable oils, such as soybean methyl ester and rapeseed methyl ester.
CFPP is the lowest temperature at which fuel is still able to flow through a specific filter. In cold climates, a fuel with a high CFPP is more likely to clog up vehicle engines.
“The winter production of PME is 10-20% that of the summer production rate for most producers,” a major PME producer from
Production rates across the region are expected to start increasing from late February to prepare for the peak demand season during summer in
Trade flow to the
B5 is a blend of 95% fossil-derived diesel and 5% palm oil-based biodiesel.
However, the capacities in the country exceed the potential domestic demand generated as a result of the mandate, industry players said.
($1 = €0.77)
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