South Korea to raise biofuels mandate to B5 by 2030

South Korea is increasing its biofuels blending mandate to 5pc (B5) by 2030, from 3pc (B3) now.

The B3 mandate has been in place since 2018 and will increase to 3.5pc from this July until 2023. It will then be set at 4pc during 2024-26 and 4.5pc over 2021-29, before rising to 5pc from 2030.

Domestic biodiesel consumption is around 600,000 t/yr under the B3 mandate and will rise to 1mn t/yr under B5, matching the country's current nameplate capacity, according to suppliers.

The current capacity should be enough to meet the 2030 target, but producers said they will have to expand if they wish to retain market share in foreign markets. South Korea exported 192,000t of biodiesel last year, of which 102,000t went to the Netherlands and 85,000t to the US.

The calculation to determine the amount of biodiesel needed to blend domestically will also be tweaked so that it will be based on the current applicable year rather than the prior year, as was previously the case. This is to give refiners more flexibility in responding to market shocks or fluctuations in consumption patterns, such as the prospect of reduced diesel demand because of the Covid-19 pandemic or a pivot away from diesel cars in favour or more eco-friendly vehicles.

By Amandeep Parmar