Production of biodiesel in the EU

With a production growth of 36% in 2008 with respect to 2007, the European Union remains the major producer of biodiesel in the world. In 2008, biodiesel production in the EU reached 8'733 Ml (i.e. 50-55% of the world production). With a production of 2'650 Ml in 2008 according to the US National Biodiesel Board, the United States come second, ahead of Argentina (approximately 1'200 Ml according to the Cámara Argentina de Energías Renovables) and Brazil (around 1'000 Ml in 2007 according to biodiesel.gov.br). The production of biodiesel in Asian countries (Indonesia, Malaysia, Thailand, China, India, etc.) in 2008 is estimated at about 2'000 Ml.

Overall, the production of biodiesel worldwide in 2008 is about 16'100 Ml (i.e. +52% with respect to 2007).

The production of biodiesel in the EU and in Switzerland is shown in the figure below. Figures are given in million litres (Ml) and refer to the year 2008.

Table : Production of fuel-biodiesel in the EU-27 and Switzerland in 2008

In a press release of 15 July 2009, the EBB (European Biodiesel Board) provides a complete summary of the biodiesel situation in the EU. The main points are listed below:

In line with the trend initiated in 2007, the year 2008 saw a relatively low increase in EU biodiesel production, and even a reduction in two major producing Member States, Germany and Austria. A clear stagnation of biodiesel output is also to be noticed in a number of EU countries.

With 8.7 billion litres, biodiesel production in 2008 increased by only 36% compared to 2007 (up from 6.4 billion litres). The year 2007 already saw a reduced 17% increase compared to 2006. This has to be compared with 2005 and 2006 biodiesel production, which increased by 65% and 54% respectively.

L'augmentation de la production de biodiesel en 2007 et 2008 n'est pas toujours pas en ligne avec l'objectif ambitieux de réduction des émissions de gaz à effet de serre récemment publiés dans la Directive Européenne 2009/28 sur les énergies renouvelables. Cette situation doit être interprétée dans le contexte d'une concurrence de plus en plus forte (et parfois déloyale) sur le marché international, qui a durement affecté la rentabilité des producteurs de biodiesel de l'UE depuis le début de l'année 2007.

The increase of biodiesel production in 2007 and 2008 is still not in line with the ambitious EU objective for climate change mitigation outlined in the recently published Renewable Energy Directive 2009/28. This situation has to be understood primarily against the background of increasing (and sometimes unfair) international trade competition which has severely affected the profitability of EU biodiesel producers since early 2007.

For more than two years, EU biodiesel producers had to compete with heavily subsidized and dumped biodiesel from the US (known as "B99"). B99 has been sold in the EU with a considerable discount, even at lower price than the raw material soybean oil. Following the complaints lodged by EBB in 2008, the European Commission's investigation established that unfair US B99 caused significant damage to the EU biodiesel industry, particularly in terms of profitability and return on investments.

In March 2009, the European Commission imposed provisional anti-dumping and countervailing measures against unfairly traded US biodiesel. On 7 July 2009, these measures have been extended for 5 years following the approval of EU Ministers.

In spite of degraded market conditions, the EU biodiesel industry showed some relative resilience, allowing a moderate production increase in 2008 compared to 2007. This however stands far below what EU biodiesel producers could achieve in a more favorable environment.

The table below shows the evolution of biodiesel production over the past 7 years in the 10 major producing countries in the EU.

Table : Legal aspects of biodiesel production in the EU (situation in 2002-2008)

In spite of a slight production reduction with respect to 2007, Germany remains by far the major biodiesel producer in the EU with nearly 3.2 billion litres (i.e. 36% of the global production in the EU). Germany is followed by France whose production exceeds 2 billion litres in 2008 for the first time, and by Italy (670 Ml). Belgium, Poland, Portugal, Austria, Spain and the United Kingdom come next, with a production of 200-300 Ml.

The production of biodiesel within the EU has grown significantly over the past ten years, reaching an output of more than 8'700 Ml in 2008, i.e. an average increase of +36% per annum between 1992 and 2008. Production increase was also 36% between 2007 and 2008. The figures presented here are those of the European Biodiesel Board (EBB).

Table : Evolution of biodiesel production in the EU-27

The production capacities in the European countries are much larger (by a factor of 2 at least) than the actual production. In 2008, according to the EBB, the production capacity in the EU was 18'000 Ml/yr compared to a production of 8'733 the same year. In 2009, the EBB inicates a production capacity of the order of 23'500 Ml/yr (on the basis of 330 operating days per year) for a total of 276 plants (as of July 2009), i.e. an increase of more than 30% with respect to 2008.