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Biodiesel is the name of a clean burning alternative fuel, produced from renewable resources. The most commonly used feedstocks are rapeseed, soy and palm oil.Tallow is also used. Rapeseed methyl ester (RME) is mainly produced in Europe; soy methyl ester (SME) comes mainly from the Americas and palm methyl ester(PME) from Asia, in particular Malaysia and Indonesia.

Prices of the different products reflect their different cold filter plugging points (cfpp) with lower cfpp levels at a premium.

RME will usually be sold with a guarantee of -14°C cfpp, SME with -4°C and PME 15°C. These numbers represent the cfpp point of the product on its own rather than the overall cfpp point once blended into fossil fuel. The exact cfpp point may vary according to quality. If a product is outside of normal industry specifications then this will be mentioned in the text rather than included than used in quotes.

Fatty acid methyl ester (FAME) refers to European blends of biodiesel. These blends contain different quantities of the pure vegetable and/or tallow oil methyl esters depending on the cfpp point desired.

ICIS quotes prices in Europe for the three most commonly used FAME cfpp levels: 0, -5 and -10. All FAME quotes are for unadditivated material.

Biodiesel contains no fossil fuel, but it can be blended at any level with petroleum diesel to create a biodiesel blend. Biodiesel is simple to use, biodegradable, non-toxic, and, if pure and unadditivated, essentially free of sulphur and aromatics.

Biodiesel is made through a chemical process called transesterification whereby the glycerine is separated from the fat or vegetable oil. The process leaves behind two products – methyl esters (the chemical name for biodiesel) and glycerine (a by-product usually sold to be used in soaps and other products).

Biodiesel can be used as a pure fuel or blended with petroleum in any percentage. In France, 5% biodiesel is common, and this has also been introduced in the UK. Vehicle manufacturers’ warranties cover use with 5% biodiesel blends. 100% biodiesel must meet EU quality standard EN 14214.

In Europe, the Renewable Energy Directive (RED) stipulates that renewable energy should have a minimum 10% share in transport by 2020 and that this energy should come from sustainable feedstocks. This has resulted in a greater amount of RED certified biodiesel becoming available in the market.

ICIS reports cover all the relevant ongoing RED discussions at both a state and EU level.

European biofuel legislation is under discussion to roll back targets after concerns that biofuel crops may be contributing to high food prices. ICIS reports cover all the relevant ongoing discussions and votes at both a state and EU level.

Asian biodiesel is made mostly from palm oil and is called Palm Methyl Ester (PME). Palm oil producing countries like Malaysia and Indonesia are the main Asian biodiesel producers.

The use of biodiesel has various environmental benefits. Tests have shown that the toxicity of biodiesel is lower than that of petroleum-based diesel, and that in the environment it degrades more readily.

In terms of storage, handling and distribution, biodiesel is as safe as diesel, and it has a much higher ignition point. Biodiesel can be safely stored without degrading for up to six months. To keep for longer than that stabilising additives are needed.

ICIS pricing quotes Biodiesel in Europe, Asia, the US and Argentina.

To find out more Biodiesel Methodology June 2012

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