World Biodiesel Output Growth May Slow - Licht
Date: 29-Mar-07
Country: UK
Overall worldwide production of the renewable fuel source was 5.4 million tonnes last year, up 80 percent from 3.0 million tonnes in 2006. The report said 2007 production will total 7.9 million tonnes, an annual growth rate of 46 percent.
"Biodiesel producers throughout the world benefited from spectacular growth conditions in 2006...brought about by relatively low feedstock costs and very strong product values," Licht wrote in its fortnightly World Ethanol & Biofuels Report.
"The year 2007 will see a reversal of these fortunes," the Ratzeburg, Germany-based soft commodities monitoring group said.
European biodiesel production in 2006 led the world, converting crops of rapeseed, sunflower and other oilseeds into 3.96 million tonnes of fuel, a 50 percent jump from 2005's 2.63 million tonnes.
For 2007, F.O. Licht forecast European biodiesel production at 4.72 million tonnes, up 19 percent year-on-year.
The Americas, led by the United States' 750,000 tonnes, or some 77 percent of regional output, produced 980,000 tonnes of biodiesel in 2006.
Licht said growth in the United States is set to be the most dynamic in the world in the coming year, with 105 plants on line and 77 more under construction.
"Research agency FAPRI estimates that biodiesel production (in the US) could rise to 1.8 million tonnes in 2007/08 from 1.3 million in 2006/07," Licht said, adding that US production capacity this year could potentially reach 2.5 million tonnes.
GERMAN CUTS
In 2006 Germany was by far the largest biodiesel producer in the European Union, increasing output some 45 percent to around 2.2 million tonnes from 1.5 million tonnes the year before.
However, the German government set a tax of nine cents per litre on biodiesel at the pump in the summer of 2006, and said it intends to raise the duty in automatic stages through 2012 until it matches the 45 cent per litre fossil diesel tax.
The report said the partial taxation resulted in considerably lower sales and was likely to impact 2007 biodiesel production as well.
"Sales of B-100 (pure biodiesel) at German gas stations fell by 8 percent year-on-year in 2006 to 476,000 tonnes," F.O. Licht said, quoting The Working Group for Quality Management in Biodiesel, a German-based industry advocacy group.
"Even so, Germany's total biodiesel production capacity is still expected to rise sharply by 600,000-700,000 tonnes in 2007," F.O. Licht said.