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Biodiesel

Biodiesel is a renewable fuel for use in diesel vehicles or any equipment that operates on diesel fuel. Biodiesel's physical properties are similar to those of petroleum diesel. It is manufactured from plant oils, in the EU mainly rapeseed oil, palm oil, use cooking oil (UCO) or animal fats and various combinations of these feedstocks. Used cooking oils are mostly plant based, but may also contain animal fats. Used cooking oils are both recycled and renewable.

The biodiesel manufacturing process converts oils and fats into chemicals called long-chain mono alkyl esters, or biodiesel. These chemicals are also referred to as fatty acid methyl esters (FAME), and the process is referred to as esterification. Roughly speaking, 10 weight units of oil or fat are reacted with 1 unit of a short-chain alcohol (usually methanol).

The term biodiesel includes traditional biodiesel, fatty acid methyl ester (FAME) but also hydrogenated vegetable oil (HVO) is considered as biodiesel. The EU is the world’s largest biodiesel producer. Biodiesel is also the most important biofuel in the EU and, on an energy basis and represents about 75 percent of the total transport biofuels market. Biodiesel was the first biofuel developed and used in the EU in the transportation sector in the 1990s. EU biofuels goals set out in Directive 2003/30/EC (indicative goals) and in the RED 2009/28/EC (mandatory goals) further stimulated the use of biodiesel.

Production and Production Capacity

The structure of the EU biodiesel sector is very diverse and plant sizes range from an annual capacity of 2.3 million liters owned by a group of farmers to 680 million liters owned by a large multi-national company. Biodiesel (FAME) production facilities exist in almost every EU member state. In contrast, HVO production is concentrated in only six countries. Most of the HVO capacity consists of dedicated HVO plants, while in Spain HVO is co-processed with conventional fuel in oil refineries. 

Feedstock Use and Co-products Production

Rapeseed oil is still the dominant biodiesel feedstock in the EU accounting for 45 percent of total production in 2017. However, its share in the feedstock mix has considerably decreased compared to the 72 percent share in 2008 mostly due to higher use of recycled vegetable oil/used cooking oil (UCO) and palm oil. For 2018, rapeseed oil use is forecast to take a further dip as rapeseed oil based FAME (RME) has a hard time competing with cheap imported soybean oil methyl ester (SME) and palm oil methyl ester (PME). UCO was the second-most important feedstock in 2017, with 21 percent of total feedstock. 

Palm oil came in third place in terms of feedstock use in 2017 (18 percent). Its use has further increased mainly because of its use for HVO production (Italy) and competitive price (biodiesel production in Spain). Currently palm oil is mainly used in Spain, Italy, France, and the Netherlands, and to a much lesser extent in Germany, Finland, and Portugal. 

The majority of palm oil is imported while a large share of soybean oil is crushed from imported soybeans. In contrast, the majority of rapeseed oil is of domestic origin. The 5.1 MMT of rapeseed oil feedstock projected for 2018 is equivalent to about 12.8 MMT of rapeseed. This also generates about 7.7 MMT of rapeseed meal as byproduct most of which is used for animal feed. 

(references, EU Commission, USDA GAINS report 2018)