EU ethanol production expected to grow in 2017 and 2018

biofuels news item image

EU ethanol production is expected to grow in 2017 and 2018, according to the USDA Foreign Agricultural Service’s EU Biofuels Annual 2017. This growth will come despite bioethanol consumption being in decline since 2011.

“In 2014, the sector benefitted from low feedstock prices and restrictive measures on bioethanol imports, and as a result EU bioethanol production rose to about 5.3 billion litres,” the report states. “In 2016, EU bioethanol production dipped due to financial problems within the sector but is forecast to recover to nearly 5.4 billion litres.”

The slight increase anticipated in 2017 and 2018 is based on increased use of existing capacity and a growing demand from member states as they attempt to reach their 2020 targets under the Renewable Energy Directive. The report highlights Germany, the UK, the Netherlands, Hungary and Poland as the main countries that are currently increasing production.

Production in France, Belgium and Austria has stabilised and is expected to remain flat through 2018. A slight decrease in production is forecast in Spain and Romania.

 

Advanced outlook

The report points out that while the proposed changes to the Renewable Energy Directive, dubbed RED II, progressively cap the use of food based biofuels, the blending rates for advanced biofuels are progressively increased. This is likely to see a significant increase in production of hydrogenated vegetable oils (HVO), which can be produced from waste oils and fats.

“In 2016, HVO production is estimated at 2.4 billion litres, and is expected to increase to about 2.6 billion litres in 2017. With new plants in Italy and France, production could further expand to about 4 billion litres in 2020,” the report claims.

“The commercialisation of cellulosic ethanol is lagging behind compared to the development of HVO. The main factors that prevent operators from investing in cellulosic biofuels are high research and production costs and regulatory uncertainty.”

According to the report, specific mandates will play an important role in the further commercialisation of advanced biofuels.

“Italy was the first EU Member State to mandate the use of advanced biofuels. The Decree requires gasoline and diesel contain at least 1.2 percent of advanced biofuel made of waste and non-food feedstocks as of January 2018 and 2019, rising to 1.6 percent in 2020 and 2021, and 2 percent by 2022. Denmark also approved a specific target for advanced biofuels, namely a 0.9 percent blending mandate by 2020 for use in transportation.