OILS AND FATS IN THE MARKET PLACE
BIODIESEL
The major biofuels in present use are bioethanol added to petrol (gasoline) and biodiesel added to petro-diesel. Bioethanol is produced from sugar cane in Brazil or from corn (maize) in the USA, with these two countries the major producers of bioethanol. Total production is growing but this is not a fat-based commodity and will not be considered further here.
Biodiesel is generally the methyl esters of natural triacylglycerols. These can replace petro-diesel completely, but more commonly the two components are blended at levels up to 5% of biodiesel for use in combustion engines.
Data about biodiesel can be discussed at three levels:
Government mandate. Many countries have laid down mandates (targets) for the introduction of blends of biodiesel. For example, the targets in EU27 were 2.5% of total transport fuel requiring 5 million tonnes of biodiesel in 2005, and are 5.75% requiring 11 million tonnes of biodiesel in 2010, and 10% requiring 20 million tonnes of biodiesel in 2020. These targets are not likely to be achieved but considerable progress has been made, particularly in Germany.
Plant capacity. Many companies have seen biodiesel production as a profitable investment. However economic aspects have always been a difficulty. Biodiesel is only profitable when it is subsidised, usually by a reduction in fuel tax. But subsidies can be given and subsidies can be taken away, making for uncertainty. These fuel tax reductions represent a loss in tax revenues which has to be corrected elsewhere in the tax system as biodiesel production grows. The most costly part of biodiesel production is the cost of feedstock and insofar as this is a traditional vegetable oil, costs have risen very much in the last year (see webpage on Prices of Commodity Oils) with the result that many biodiesel plants are being under-used or not used at all, awaiting a cheaper feedstock. Capacity levels are considered to be around three times production levels.
Production. Except through expensive business reports it is not easy to find up-to-date information on production levels. According to the European Biodiesel Board [www.ebb-eu.org/stats.php], European production of biodiesel, mainly from rapeseed oil, was 3.2 million tonnes in 2005 and 4.9 million tonnes in 2006. The major producing countries in 2006 were Germany (2.66 mt), France (0.74 mt), and Italy (0.45 mt) with 21 other European countries together producing 1.04 mt. In July 2007 production capacity was 10.3 mt. (Germany 4.36 mt, Italy 1.37 mt, France 0.78 mt, UK 0.66 mt, and Spain 0.51 mt. with other European countries having smaller capacities). According to the National Biodiesel Board, US production was 75 million (US) gallons in 2005 and 225 million gallons in 2006, the latter being equivalent to 0.75 million tonnes. US production in 2015 is predicted to be 6.3 million tonnes. US production capacity in September 2007 was 1.85 billion gallons, equivalent to 6.2 million tonnes of biodiesel.
Feedstocks for biodiesel production can be categorised as conventional vegetable oils, fats of animal origin, and other (mainly non-food) sources. The vegetable oils used for biodiesel are mainly rapeseed oil in Europe, soybean oil in USA and Argentina (for export to Europe), palm oil in Malaysia and Indonesia for export, and coconut oil in the Philippines. Sales will be related to the relative cost of biodiesel and biodiesel. In most developed countries biodiesel is subsidised, in developing countries diesel is itself often a subsidised product, which complicates the position further. A significant factor (in 2008) is the rapidly increasing cost of both the fossil fuel from which diesel is distilled and of the vegetable oils from which most biodiesel is made. Cheaper biodiesel feedstock includes waste fat from frying operations from fast food shops and from industrial frying processes, animal fat below the premium grades accepted for food purposes, food from animals themselves unfit for human consumption, and poultry fat.
The Jatrophus curcas plant is a non-food crop often grown as a hedge to keep animals out of fields. Some varieties are toxic, some are not. This plant is being grown in India and in Africa and elsewhere as a potential source of vegetable oil that can be used as biodiesel. Work remains to be done to find the best varieties of this plant and the agricultural conditions which will supply the best yields. The first samples of Jarroha oil are now available but they are still too small to affect the overall picture. In two or three years, it is expected to become more significant. Other minor oils are being investigated in several countries. Of particular significance are those that can be grown with only modest inputs on poor land that is either too salty or too dry. There have been recent reports on the cultivation of Pongamnia sp., Pistacia chinensis, Cornius wilsoniana, Xanthoceras sorbifolia, poppy seed, mustard, and camelina in various countries as sources of oil that could be used for biofuel. These are serious studies but it will be several years before they have any significant effect on supplies of biodiesel.
Another potential feedstock is algal oil. In a recent article on microbial and algal oils two long-time workers in this field (Ratledge and Cohen) discussed the potential for using algal oil as a source of biodiesel. Algae are microscopic plants able to fix carbon dioxide as carbohydate using light as a source of energy. Under appropriate conditions the carbohydrate can be converted to lipid in situ. The carbon dioxide may be atmospheric but efficiency is increased with an enriched source such as those obtained from flue gases or from brewing processes. The photosynthetic system only operates during periods of daylight and is reversed during hours of darkness. It can be carried out in open ponds on land not otherwise suitable for agricultural production at yields in excess of those attained with conventional plants. It is concluded that under the most favourable conditions with all costs covered and an adequate financial return the minimum production cost would be US$ 1400/tonne. This is close to today’s exceptionally high prices.
In a recent lecture, the source of European biodiesel in 2005 and that required in 2010 and 2015 was reported to be as in Table 1 with increasing quantities coming through imported seeds, oils, or biodiesel. The imported biodiesel is expected to be from SE Asia (palm biodiesel) or from Argentina (soybean biodiesel).
Table 1. Sources of feedstock for European supplies of biodiesel in 2005, 2010, and 2015 showing the increasing importance of imported diesel from SE Asia and Argentina. |
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| 2005 | 2010 | 2015 | |
|---|---|---|---|
| Rapeseed oil | 2.5 | 5 | 6 |
| Other EU oils | 0.5 | 1 | 1 |
| Imported oils and seeds | - | 1 | 2 |
| Imported biodiesel | - | 4 | 6 |
| Total | 3 | 11 | 15 |
Table 2 shows that around 5 million tonnes of additional biodiesel will be expected each year up to 2015. In the second half of this period, the increased demand will be met less from Europe and the US and more from South America and the Asia-Pacific region. Another report from The Freedonia Group (March 2008) shows demand for biodiesel between 2001 and 2016 as follows 2001 (1.1 mt), 2006 (6.0 mt), 2011 (23.60 mt), and 2016 (37.5 mt). The annual increase to meet these demands are somewhat lower than those in Table 2.
Table 2. Annual increases in world production of biodiesel in the short and medium term (million tonnes). |
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| 2008-10 | 2011-15 | |
|---|---|---|
| World | 5.0 | 4.7 |
| USA | 0.8 | 0.4 |
| EU | 1.7 | 1.2 |
| South America | 1.1 | 1.1 |
| Asia-Pacific | 1.1 | 1.4 |
| Other | 0.3 | 0.6 |
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Updated: 27/6/2008 |
Scottish Crop Research Institute (and MRS Lipid Analysis Unit), Invergowrie, Dundee (DD2 5DA), Scotland
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