Global FAME production volumes to fall in 2012 - analyst

28 November 2012 15:33  [Source: ICIS news]

MADRID (ICIS)--Global production of fatty acid methyl esters (FAME) – the most common type of biodiesel – is expected to show a decrease in 2012, Claus Keller, senior commodities analyst at F.O. Licht said on Wednesday.

Although total biodiesel production will continue increasing, the market share of FAME will decrease in favour of hydrogenated vegetable oils (HVO), an alternative biodiesel.

“Hydrogenated vegetables are, due to their technical and chemical characteristics, the refiners’ fuel of choice, and they will definitely take away some potential demand for [FAME] in the years to come,” said Keller, speaking at the World Methanol Conference in Madrid.

While global FAME production is expected to recover slightly in 2013, Keller does not expect it to reach the levels of 2011.

Keller explained that the decrease in FAME output was due to the emergence of HVOs, as well as regulatory changes in the EU – the primary consumer of biodiesel – and in Argentina, a major producer.

As well as HVOs’ technical superiority, they often count double towards mandated renewable fuel quotas because they can be produced from waste material, which makes them even more attractive to produce.

Keller also highlighted several other factors that could constrain FAME output expansion in the mid-term. These include the better availability and lower price of fuel ethanol – another renewable fuel – and the world’s rising food requirements.

FAME is usually produced from edible biomass, whereas ethanol has a broader base of potential feedstocks.

Methanol, in addition to biomass, is a feedstock of FAME.

By: Ross Yeo
+44 208 652 3214

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