January 11, 2019

Indonesian Palm Oil Feels Squeeze as Spanish FAME Feedstock Diversifies

Stratas Advisors

This excerpt is from a report that is available to subscribers of Stratas Advisors’ Global Biofuels Assessment service.

Despite being only the fifth largest EU member state in terms of population, Spain consistently ranks among the top three biomass-based diesel producers and consumers in Europe. The diesel-gasoline consumption ratio in Spain is 3:1, compared to an EU average of 2:1. Traditionally, more than half of the country’s total biomass-based diesel has been derived from Indonesian palm oil. However, since 2017 Argentine SME has cut into Indonesian palm oil market share. Additional shifts in feedstock composition are expected in 2019 as Spain starts implementing double counting measures for advanced biofuels while EU AS-duties are underway and the European Commission (EC) will take a decision on what feedstocks are considered high-risk indirect land use change (ILUC). 

In H1 2018, ethanol represented 13.7 vol% of Spain’s total biofuels sales, a mild decline compared to 14.8 vol% in H1 2017. This is mainly due to a rapid growth in FAME consumption, which increased its market share from 65.1% of biofuels sales in H1 2017 to 71.6% H1 2018. Total biomass-based diesel sales witnessed a whopping year-on- year growth of 20%, while ethanol sales also expanded by 10%.

Source: CNMC

The lion’s share of consumed ethanol and HVO volumes are produced inside Spain, with domestic production remaining steadily above 85% of demand for these two biofuels since 2016. The portion of domestically produced FAME decreased from 93% of total consumption in 2015 to 60% H1 2018. This decline can largely be attributed to increased SME imports from Argentina. While Spain imported virtually no SME from the country in 2015, Argentinian imports represented 20% of Spain’s FAME market in H1 2018.

Source: CNMC

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