Biofuels associations advise EC caution over waivers

European associations representing the biofuels supply chain have sent a letter today to the European Commission addressing potential waivers for biofuels blending mandates in response to the coronavirus pandemic.

The letter, addressed to vice president for the European Green Deal, Frans Timmermans, and signed by seven associations including the European Biodiesel Board (EBB) and ePure is aimed at addressing possible mitigation measures. It said that certain EU states were "considering implementing derogations to their blending obligations", although it did not outline which members were touting the plans.

It added that members were not experiencing any difficulty in meeting the existing and decreasing demand for biofuels and that any potential waiver on national blending obligations would result in "further strain on the availability of EU-produced protein supplies for livestock and hence impact animal production chains."

The European biofuels industry is already severely affected by the sharp drop in fuel consumption and the corresponding decline in the demand for biofuels and by-products, the letter added.

In response, the European Waste-to-Advanced Biofuels Association (Ewaba) told Argus that the waste biodiesel industry rejected any potential waiving of biodiesel mandate obligations in European countries. "The Covid-19 crisis actually shows that systemic risks should be addressed before they get out of hand, and for this very reason this is not the moment to renounce climate mitigation," it said.

Ewaba secretary general Angel Alvarez Alberdi said the EU should not abandon climate objectives embodied in the Green Deal, or its international commitments. "If waste biodiesel production were to be halted for a significant period, more than a million tonnes of noxious waste would end up producing additional greenhouse gases in landfills instead, thus further worsening the situation," he said.

Demand for all biodiesel grades has slowed in recent weeks in line with lower diesel consumption as EU governments restrict movement and implement lockdown measures to prevent the spread of the virus. Biodiesel market participants expect a significant reduction in output in April as already negative production margins for domestically produced product are unlikely to recover soon.

Biodiesel prices have fallen sharply in northwest Europe throughout February and March, with domestically produced rapeseed oil-based biodiesel spot values hitting an all-time low yesterday.

Spot prices for T2 ethanol have also dropped sharply since the start of February, softening to record lows in the same trading session.

The Federal Association of the German Bioethanol Industry (BDBe) said today that special regulations have been put in place to enable the use of undenatured ethanol in the production of disinfectant.

By Leonidas Kanonis, Giulia Squadrin and Daniel Mackay