Asia PME makers hit by new US biodiesel standards

16 October 2008 11:36  [Source: ICIS news]

SINGAPORE (ICIS news)--New standards regulating the technical specifications for biodiesel use in the US are exacerbating already lacklustre demand for Asian palm methyl ester (PME) cargoes, producers said on Thursday.

 

The American Standards of Testing and Materials (ASTM) announced new biodiesel standards on Tuesday, with one of the largest changes impacting Asian PME makers being the inclusion of the “cold soak filtration test”, which would effectively bar most PME from being used in the US, they added.

 

“To put it simply – [cargoes made by] most PME makers cannot pass cold soak,” one regional producer said, adding they had already switched their focus to other markets like Europe, despite the current lack of demand due to the seasonal winter lull.

 

In order to meet the new specifications, Asia facilities would have to remove the C16 (fractionated fatty acid) content in PME, which would entail the costly installation of an additional distillation column, market sources said.

 

There was talk that some larger producers especially in Indonesia had begun work to install additional distillation equipment in order to comply with the new ASTM standards, although this could not be confirmed.

 

PME has a higher cold filter plugging point compared with its counterparts made from soy or rapeseed, rendering it particularly susceptible to the new standards - which sets a rigid bar for cold weather vulnerability for biodiesel use.

 

PME is a palm oil derivative which can be used as a substitute for conventional diesel.

 

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Author: Jeremiah Chan
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