Sunday, March 20, 2011

A future for the Biodiesel Industry?

A Crisis for the Biodiesel Industry

Just back from participation in the Bursa Malaysia Palm Oil Conference Price Outlook 2011 it is clear that it is not possible to dedicate more vegetable oil for biodiesel production. The biodiesel industry in Europe has for years been in a deep crisis. Expensive plants have gone from hugely profitable to bankruptcy. At the same time as plants overseas in Indonesia, Argentina and Brazil are profiting from national export tax regimes to stay in business. The whole industry strongly depending on the goodwill of politicians as they try to find an appropriate answer to the strategic and environmental problem: crude oil. The Fuel versus Food dilemma, isn't really a dilemma, as it is clear that good quality biological oil (vegetable or animal origin) must be used for human (or animal) consumption, as the global population continues to grow.

Is there a Future for the Biodiesel Industry?

Well, frankly it is difficult to see in the longer term. Worldwide biodiesel plants are scrambling to turn to by-product based feedstock like used cooking oil and tallow. This however will not save the industry, as the relevant by-products is very limited in volume world wide. The rise in demand has already driven up prices for these feedstock to levels where plants are hardly profitable. It seems like nobody took the time to do the math. At the current stage the biodiesel industry is consuming close to 12% of world wide production of biological oils, and it is still only a drop in the ocean in terms of the demand for transportation fuels.

By-product based Feedstock is the new Cool Aid

For many biodiesel manufacturers producing biodiesel from by-products seems to be the way to go. With a better environmental profile, support from NGOs and lower raw material cost this seems to many manufacturers to be the way forward. While we wait for a better solution to our need for carbon dioxide neutral transportation fuels, we in MBP Group are ready to assist biodiesel manufacturers with access to by-product based feedstock from all over the world. MBP Group is ready with a Renewable Energy Directive (RED) compliant supply chain solution for the German marked already from 2011. Germany is the first European market to fully implement the EU RED and we are ready with a solution for this market starting now.

World Biofuels Markets 2011 in Rotterdam

MBP Group is the proud silver sponsor of the World Biofuels Markets 2011 conference in Rotterdam from 22nd to 24th of March. Here it will be exiting to hear the industry's interest in working with MBP on securing suitable by-products for feedstock. At the WBM MBP will also be promoting our own biofuel production in Scandinavia where we produce and distribute by-product based, RED compliant biofuels as an alternative to mineral oil based heating oils.

It will be interesting to hear where the experts think the biofuel industry is going. Is Neste Oil actually going to be able to turn their investments in two biodiesel plants in Rotterdam and Singapore into profitable operations? When will cellulosic bioethanol become a commercial and competitive product? No doubt the World Biofuels Markets will be an interesting event.

If you are going to WBM, drop me a line so we can meet up.

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