Spain's biodiesel consumption rises 12% in Jan-Aug 2017: govt data

Spain’s consumption of biodiesel increased 12% in the first eight months of 2017 as the country stepped up its blending requirements, although falling diesel car sales last year are likely to have slowed demand for biodiesel compared with a business-as-usual scenario, government data released last week shows.

The EU’s fifth-largest economy consumed 670,442 cubic metres of biodiesel in the period January to August 2017, up 12% from the 598,411 cubic metres consumed in the equivalent period in 2016, according to the figures published by the National Commission of Markets and Competition.  

The dominant trends for biodiesel consumption in 2017 by August were big year-on-year increases in the first quarter, but a large drop in the second quarter.

The 12% increase overall over the eight month period came against the backdrop of a higher biodiesel consumption mandate (5%) and a continuation of the prevailing rate of duty for most of the year.

Spain also experienced GDP growth of 3.1% in 2017 while expected eurozone growth of just under 2% is likely to have benefitted Spain’s haulage industry, a major demand source for diesel.

Consumption of hydrotreated vegetable oil (HVO) was 233,092 cubic metres during the first eight months of 2017, compared with 211,593 cubic metres in the equivalent period in 2016.

Spain’s production of biodiesel in the first eight months of 2017 was 1.121 million cubic metres, up from 912,770 cubic metres in the January-August period in 2016.

The country exported around 40% of its biodiesel in the 2017 period, with 465,710 cubic metres transported from Spanish territory.

Spain produced 297,462 cubic metres of HVO in the first eight months of last year, up from 239,900 cubic metres of output in January-August 2016.  Exports of HVO produced in Spain rose to 44,314 cubic metres during the reporting period, up from 30,001 in the equivalent period in 2016.   

In terms of bioethanol, Spain consumed 174,462 cubic metres over the period, down from 185,903 cubic metres in the same period in 2016.  

The breakdown in feedstocks for biodiesel consumed in Spain during the first eight months of 2017 showed that 65% of the feedstock was derived from palm oil, unchanged from full year (FY) 2016 levels, with most of it coming from Indonesia.

Just over 21% of biodiesel feedstock was derived from rapeseed, up from a 15.5% share the year before.

Soy accounted for 11.5% of the feedstocks used in biodiesel up from 10.3% for FY 2016.

Used cooking oil accounted for hardly any of biodiesel feedstocks in 2017 and 2016, although in 2015 the share was almost 12%.

These figures suggest that Spain will be one of the countries most affected by a potential exclusion of palm oil from the EU’s renewable energy directive for the period 2021-2030, meaning that Spain’s 15 biodiesel plants will very likely have to source alternative feedstocks.

In common with most other large EU countries, Spain reported a big drop in sales of diesel cars in 2017, with the market share of diesel cars dropping to 48.3% from 56.8% in 2016. 

Consumers are wary of buying new diesel cars against the backdrop of the emissions testing scandal and Madrid’s plans to ban older diesel vehicles from 2025, heightening uncertainty about resale values.   

The US Department of Agriculture’s GAIN report on Spain said demand for biodiesel would likely increase in 2018, mainly because of the increased blending mandate to 6%.

However, it added that the transposal to national law of EU Directive 1513/2015, among other factors such as competition from imports, “will determine 2018 biodiesel consumption and production dynamics in Spain.”