Market Trends of Europe Biofuel Industry
Biodiesel is Likely to Dominate the Market
- Biodiesel is a clean-burning alternative fuel produced from domestic and renewable resources. This biofuel is made from vegetable oils, animal fats, or recycled greases. Biodiesel is non-toxic and can be the source of fuel for diesel-powered vehicles.
- Europe makes the most biofuels, such as biodiesel and ethanol, than any other place.In 2020, the region produced 302 million barrels (mbbl) of biofuel, which was higher compared to 260 mbbl of biofuel in 2015.
- Moreover, due to limited fuel switching, biodiesel is the primary fuel used in heavy-duty vehicles, agriculture, construction, mining, and other heavy industries. With improved engine efficiency, this offsets the increased demand tied to economic growth.
- In March 2022, BioEnergy International GmBH built a cutting-edge biodiesel production facility in Hungary that was believed to fuel 70,000 cars and save 150,000 tons of carbon dioxide. The new facility will significantly help Hungary meet its goals to create 55% fewer greenhouse gases by 2030 and achieve climate neutrality by 2050.
- Because of these changes, the biodiesel market is expected to grow during the forecast period.
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Germany is Expected to Dominate the Market
- Germany is one of the largest producers of biofuel in the world. The country is encouraging the usage of biofuel in the road transportation sector to reduce greenhouse gas emissions.
- In 2021, the country produced 54 thousand barrels of oil equivalent per day of biofuel, which is equivalent to 4% of the world's biofuel production.
- In February 2022, BDI-BioEnergy International GmbH announced a contract with Renewable Energy Group to upgrade two biodiesel plants in Germany by installing feedstock pre-treatment technology to process fats and oils. The project is expected to be commissioned by the second half of 2023.
- By 2030, Germany's Ministry of Agriculture plans to phase out the use of biofuels made from food and feed crops like sunflower and soy oils. This is mostly because of supply chain disruptions brought on by Russia's invasion of Ukraine and rising feedstock costs. The 200,000 metric tons per month of sunflower oil shipments to the European Union have been stopped since March 2022 as a result of Russia's invasion of Ukraine. Since 35% to 45% of the sunflower oil used in EU refineries comes from Ukraine, the region's supply is thought to last four to six weeks. With Ukraine and Russia accounting for about 80% of global exports of sunflower oil, Russia's invasion of Ukraine has left importers such as the European Union looking for alternatives. Thus, such instances are likely to restrain the demand for feed and food crops for biodiesel production in Germany.
- In May 2021, the German government introduced a new biofuel law. As per the new law, obligated oil companies will have to significantly increase the use of biodiesel, bioethanol, and biomethane in the transportation sector to reduce carbon emissions.
- This is likely to boost the biofuel market in the country, which is expected to support the growth of the European biofuel market during the forecast period.
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