EU biodiesel output up 35 percent, capacity growing

Production of biodiesel in the European U-nion rose by more than 35 percent in 2008 and capacity will grow again this year although half the plants are idle due to poor demand, the EU producers group said on Wednesday.

The Brussels-based European Biodiesel Board (EBB) said the European production of biodiesel, by far the main biofuel made in the bloc, had reached 7.76 million tonnes last year putting the EU’s global market share close to 65 percent.
In addition to a fall in demand mainly linked to strong U.S. competition, EU producers have also suffered from slumping margins as the fall in crude oil prices over the past year was not compensated by a similar drop in vegetable oils prices.

Even if the EU will have total biodiesel production capacity of close to 21 million tonnes this year — a rise of 31 percent on the year — the EBB said 2008 and 2009 statistics showed that at least 50 percent of existing plants remain idle.

“Unfair international competition has been the main driver of this trend, while the political discussions in 2008 on adoption of the Renewable Energy Directive have added to market uncertainty,” it said.

Reuters