USDA Warns EU of Stagnant Biofuel Market  

According to the latest report from the US Department of Agriculture, the European biofuels industry is on track to stagnate in 2016 thanks to the continuing existence of import tariffs. The bureau warns that unless import tariffs are relaxed the industry will remain suspended in its current state for the foreseeable future. US department representatives have been highly critical of the refusal to lift the tariffs and have accused the EU of having "effectively separated itself from the international market."

Trying tariffs

So why is the market so shut off? Due to anti-dumping legislations the EU rarely imports biofuels. Given the fact that its product is relatively uncompetitive in the international market, it also refrains from producing excess fuel, thus only just meeting flat domestic demand. Under current EU biofuel regulations production is also restricted by low blending rates. This has led to just 5% of biofuel blends being widely adopted which hinders use across member states. While the USDA would like to see the EU encourage consumers to embrace higher blend rates the union maintains that drivers would reject such products due to concerns for lifespan of engines.  

The bureau has also accused the EU of hampering the adoption of higher blend rates by continuing to allow low fossil fuel prices and failing to introduce biofuel friendly incentives. It asserts that if the EU was to liberalise imports it would lead to lower high blend biofuel prices and increased adoption rates across the continent.  

Market set to stagnate

Unfortunately these changes have yet to arise which means that biofuel demand will remain low within the subdued European economy. The USDA has revealed that total road fuel demand will fail to top its 2012 high until at least 2016, while 2016 fuel ethanol use will sit at just 5.25 billion litres, which represents a drop of .07 billion litres from 2014 and an even bigger fall of .45 billion from 2011.

The recent European ethanol price hike won’t help, with German ethanol group CropEnergies warning that "Considerable volatility is to be expected" and that "the high volatility of bioethanol prices makes outlook difficult." As a result, the USDA predicts that the EU biodiesel market will remain stagnant throughout the remainder of 2015 and well into 2016.

All biofuel that is produced will undergo strict quality control. In the article ‘Biodiesel Concentration Measurements Using Spectrum OilExpress’ authors look at the benefits of using peak area as a preferred concentration calculation technique.