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EU/BIOFUELS
Environmental focus While a projected boom in renewable diesel production is expected to disrupt the US oils and fats market, a swifter adoption of electric transport technology in Europe is likely to reduce this impact across the Atlantic, according to the European Commission (EC). In its agricultural outlook for 2021-31, the EU executive said that biofuel demand will start to “decrease as road transport fuel use starts to trickle away”. This means that EU biodiesel use should peak at 18.9bn litres in 2023, declining by 24% to reach 14.3bn litres in 2031. Bioethanol usage will also fall, although its non-fuel applications will slow its decline, with EU usage peaking at 7.1bn litres in 2023 and falling by 10% to reach 6.4bn litres in 2031. The result of these trends, encouraged by the European Green Deal policy that prioritises electrification of transport systems and the development of renewable energy, could be a more stable market mix of oils and fats between food and non-food, compared with the USA. For instance, looking at soyabean oil – a key renewable diesel feedstock – the US Department of Agriculture (USDA) forecasts EU consumption for industry use in 2021/22 (from October) to be 1.09M tonnes, and 1.37M tonnes for 22 OFI – FEBRUARY 2022
EU.Biofuels Feb 2022 NEW page 22.indd 2
The EU’s strong environmental policies are having a major impact on its oils and fats sector. However, the strength of its economy means the industry should remain secure for the next decade Keith Nuthall food. This is similar to 2020/21’s share of 1.08M tonnes for industry and 1.4M tonnes for food use. Regardless of how the EU oils and fats market is organised, the bloc remains a globally important player. Europe is a major source of oils and fats sales, with US$50.1bn in revenue generated in 2021, according to statistical analysts Statista. The market is expected to grow at a compound annual growth rate (CAGR) of 3.3% between 2021 and 2026. This growth is also projected by market researcher Mordor Intelligence, which forecasts a European oils and fats CAGR for 2020-5 of 3.35%. It said that the European vegetable oil market alone in 2020 was worth US$29.2M. These sales are being driven by “robust demand for organic health-based products, with increased consumption among health-conscious consumers of high-quality edible oils /cooking oils…”
Mordor said. It stressed that market support from the renewable energy directive (RED) and EU Common Agricultural Policy (CAP) boosts the production and sale of vegetable oil in a wide range of industries, including biofuel, food, animal feed and cosmetics.
Common Agricultural Policy
The CAP is important for food and nonfood oils and fats production and it has been reformed in the past year. A €386bn CAP for 2023-27 was finally agreed, after two years of negotiations, in November 2021, with guidance prioritising EU agricultural subsidies improving environmental performance by producers and the production of crops that reduce carbon emissions when processed. This will include funding the development of sustainable energy within agriculture, including biofuels use, and also additional funding for biofuel www.ofimagazine.com
10/02/2022 12:42:45
