Biodiesel Market Analysis

The climate change debate is leading to an increased interest in renewable fuels. All around the world governments are looking at ways to mitigate emissions from households, industry and the transport sector. While some progress has been made with regards to the former two sources of greenhouse gas (GHG) emissions the latter has proven more difficult to tackle. One approach to change this is a change in the way biofuels policies are designed. While earlier schemes normally provided for specific volume targets for the blending of biodiesel or ethanol that needed to be met, more recent efforts focus on GHG savings that transportation fuels need to achieve. This change in emphasis has far-reaching consequences. The most obvious is that GHG savings are now at the centre of interest whereas they had been a welcome side-effect of the earlier policies. Less obvious, but nonetheless crucial, is that these decarbonisation programs are agnostic with regards to the methods that result in GHG savings. Of course, biofuels are the most obvious solution to achieve these targets as they are available in meaningful volumes, can be used in the current fuelling systems and powertrains and produce much lower GHG emissions when compared to fossil fuels. However, they are not the only ones and future technological developments in low-carbon generation of electricity or hydrogen could break the current dominance of renewable fuels in this field. This shift makes these policies less vulnerable to critics that say that biofuel policies had become an unsustainable way of support for agricultural interests that re-allocate valuable resources away from food and feed to energy markets.