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SEA biodiesel industry looks to decarbonise: Correction
SEA biodiesel industry looks to decarbonise: Correction
Corrects figure for capital expenditure forecast in paragraph 15 Singapore, 30 June (Argus) — Regional biodiesel associations from Thailand, Indonesia and Malaysia called for stakeholder support to further decarbonisation goals during the 5th Palm Biodiesel Conference in Bangkok over 23-24 June. Thai electrification shift competes with biodiesel industry Thailand has been driving a shift toward electric vehicles (EVs) under the 30@30 policy, targeting at least 30pc of total motor vehicles produced annually by 2030 to be EVs, while support for biodiesel producers is waning, said Thai biodiesel producer association Chairman Sanin Triyanond. Thailand will no longer subsidise the price of biofuels such as biodiesel under the oil fund act after 24 September 2026, said Supatchalee Sophonthammaphat, an official with the Thai department of alternative energy development and efficiency (DEDE). Triyanond called for both the EV and biodiesel industries to coexist, citing a study that said an EV and biofuel energy mix was recommended for the country. A low biodiesel blend target in Thailand resulted in only 30pc of Thailand's 11.7mn l/d in installed biodiesel capacity being utilised, and high operating costs across its 14 registered companies, Triyanond said. When domestic crude palm oil (CPO) stocks fall below 200,000t, local prices also increase in comparison to the global price, he added. This raises the cost of production when biodiesel producers import CPO as it is subject to 143pc import tax and exempt from export duties in Thailand. Thailand manages CPO supplies and prices by altering its volumetric blend target for biodiesel under the alternative energy development plan (AEDP). However, the biodiesel industry has been struggling with a low blending policy and feels that the stock management program needs to be redesigned to better support producers. Indonesia needs more investment to hit B50 biodiesel blend goal Indonesia is targeting 15.6mn kl of domestic biodiesel consumption in 2025 and has been conducting road tests for a higher B50 biodiesel blend with fossil diesel this year. To meet higher biodiesel blend ratios in subsequent years, new investment from the private sector and policy support from the government on pricing, funding and legislation is needed to drive infrastructure upgrades and capacity expansions, said deputy of promotion and communication at the Indonesian biofuels producer association (APROBI) Ravi Farkhan Pratama. For suppliers, complex logistics resulting in higher costs for transporting biodiesel to remote regions remain, said manager of biofuel and additive supply chain at PT Pertamina Patra Niaga Adi Rachman. A price disparity between public service obligation (PSO) and non-PSO (NPSO) biodiesel blends in the market poses a challenge in ensuring each fuel is supplied to the right customer group, he added. The PSO sector includes state-owned firms that serve the public. Fuel suppliers in this sector receive subsidies from the oil plantation fund management agency (BPDPKS) to fund the difference between palm oil-based biodiesel and the indexed price of diesel, while non-PSO fuel suppliers do not. Biodiesel plants in Indonesia have been running at an average 80pc of Indonesia's 20.9mn kl/yr installed capacity across 24 producers this year, said Pratama. Indonesia consumed about 20pc of annual CPO production under the B35 blend mandate in 2024. This year's B40 biodiesel blend mandate could eat into exports and other avenues including food use, Pratama added. Any further increase to blending mandates would exacerbate how palm supplies are distributed between food and fuel. There are also additional costs around infrastructure upgrades such as coating pipelines and storage tanks, said Rachman. A move to a B50 blend mandate would likely happen in 2027 or later, said head of B40 road test and B40 commercial test team at LEMIGAS research and development center of oil & gas technology, ministry of energy and mineral resources Cahyo Setyo Wibowo at the event. Malaysian biodiesel producers push for higher blending mandates Malaysia's B20 biodiesel blend mandate set in January 2020 has been limited to Pulau Langkawi, Kedah, Labuan and Sarawak in the transport sector. A separate 7pc biodiesel blend is required in the industrial sector, first mandated in July 2019. President of Malaysian biodiesel association Tee Lip Teng sought a nationwide B20 implementation for on-road fuels, and a B30 blend ratio by 2030. However, Tee said that a capital expenditure of more than 600mn ringgit ($142mn) would be required to achieve a full B30 nameplate biodiesel production capacity for the transport sector in Malaysia. On the other hand, the country is set to introduce a carbon tax as early as next year, allowing palm oil methyl ester (PME) prices to be more competitive, he added. Lower palm oil prices in relation to gasoil amid oil market uncertainty and during the upcoming peak palm production season could also drive voluntary blending. But fossil diesel continues to be subsidised for qualified businesses in the transportation and logistics sector, increasing the funding burden needed to subsidise PME in these sectors. While PME production continues to face challenges, Tee cited the potential to expand waste-based biodiesel production in Malaysia. Biodiesel exports out of Malaysia rose up to 2019 before declining afterward due to the EU ban on palm-based biofuels, Tee said. Majority of the biodiesel exported now comprises used cooking oil methyl ester (Ucome) and palm oil mill effluent oil methyl ester (Pomeme) rather than PME, he added. First generation biodiesel producers should be incentivised through government grants to retrofit their plants to use waste-based oils to complement their existing palm oil feedstock, Tee said. Other alternative feedstocks carrying a lower levelized cost of production such as palm fatty acid distillate (PFAD) should be considered as a feedstock of choice, said general manager for strategy and sustainability at Petronas Dagangan Berhad Ms. Harlina Pikri. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Mexico’s trade balance swings to surplus in May
Mexico’s trade balance swings to surplus in May
Mexico City, 26 June (Argus) — Mexico's trade balance returned to surplus territory in May, as higher crude export volumes helped to offset drags on manufacturing from US tariffs. Mexico recorded a $1.03bn trade surplus in May, statistics agency Inegi reported Thursday, swinging from a $88mn deficit the previous month. Total exports in May were valued at $55.5bn, while imports reached $54.4bn. The surplus was wider than Mexican bank Banorte's forecast of $279mn. The balance reflects the trade deficit in oil-related products narrowing to $2.11bn in May from $2.87bn in April, as well as a rebounding surplus in non-oil trade to $3.14bn from $2.78bn in April. Mexico ran a $2.04bn trade surplus for the January-May period, including a $10.96bn surplus in non-oil trade and a $8.92bn deficit in oil-related trade. This reflects the longer-term trend of growing non-oil exports set against widening deficits of oil-related goods. Manufacturing exports — especially autos — have been the most affected by US tariffs enacted in March and April. Despite US exemptions tied to trade treaties, Mexico still faces an average effective US tariff rate of 11.9pc — the eighth highest globally and the highest in the western hemisphere, according to Fitch Ratings. The auto industry is also participating in negotiations to soften steel and aluminum tariffs to prevent further supply chain disruptions. Manufacturing exports fell by 0.6pc in May after a 0.7pc drop in April. Auto exports declined by 1.3pc in May, following a 4.8pc fall in April. Inegi reported a 10.3pc annual drop in the value of auto exports to the US in May, after an 8pc decline in April. Exports had surged 6.5pc in March as companies rushed shipments ahead of tariff implementation. Agricultural exports contracted by 2.6pc in May from the previous month after rising 2pc in April, while non-oil mining exports contracted 2.9pc after surging 26pc in April. Oil-related exports totaled $2.06bn in May — $1.33bn in crude and $722mn in refined products — compared with $1.83bn in crude alone in April. This comes despite a stronger peso and lower oil prices. Mexico's crude export mix averaged $57.88/bl in May, down $2.94/bl from April and $16.51/bl below the year-earlier level. Crude export volumes rose to 743,000 b/d from 693,000 b/d in April but remained below the 930,000 b/d exported in May 2024. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
US reps resist Senate approach to biofuel credit
US reps resist Senate approach to biofuel credit
New York, 26 June (Argus) — A coalition of US House members is pushing the Senate to scrap planned changes to a tax credit that the biofuel industry sees as crucial for profitable production. Republicans in both chambers have looked to use a fillibuster-proof budget bill to keep but modify the Inflation Reduction Act's "45Z" tax credit, which increases subsidies for fuels with lower emissions. But some farm-state House members are displeased with the Senate's approach , including less-punitive treatment of foreign feedstocks and substantial cuts to subsidies for sustainable aviation fuel (SAF). "We respectfully urge you and your committee to revise the language around 45Z to reflect the House language," seven House Republicans, including three on the House tax-writing committee, wrote Wednesday in a letter to Senate Finance Committee chair Mike Crapo (R-Idaho). Both the House and Senate bills would prevent tax officials from factoring in indirect emissions from land use changes, a win for crop-based fuels like corn ethanol, and would extend 45Z four more years through 2031. But the House bill, which passed the chamber narrowly last month, would also strip eligibility from fuels derived from feedstocks outside North America starting next year. The Senate Finance draft, on the other hand, cuts subsidies for fuels from foreign feedstocks by 20pc while still allowing them some credit. The issue is highly contentious across the biofuel supply chain. Farm groups say that recently fast-rising imports of used cooking oil and tallow are hurting demand for domestic crops that can also be refined into renewable diesel. Refiners insist that flexibility around feedstocks is essential for scaling up biofuel output. The House lawmakers say that the Senate language would "subsidize imported feedstocks", some of which come from countries that "actively discriminate against our domestic biofuels industry". The House letter also asks the Senate to retain additional subsidies for SAF, which they say are critical given the fuel's typically higher cost of production. Under current law, road fuels are eligible for up to $1/USG and SAF up to $1.75/USG, plus inflation adjustments for all types of fuel — but the Senate Finance draft would eliminate that jet fuel premium. Notably, the House lawmakers say they prefer the Senate's more lenient approach to tax credit "transferability", which allows smaller companies without enough tax liability to instead sell tax credits to other businesses. President Donald Trump has pushed lawmakers to send him the budget bill before 4 July, but lawmakers still disagree on key details with just days before that self-imposed deadline. Along with fighting over energy policy, some conservatives are wary of the package's potential impact on the federal budget deficit and want more sweeping cuts to government spending. The letter was signed by representatives Michelle Fischbach (R-Minnesota), Randy Feenstra (R-Iowa), Max Miller (R-Ohio), Zach Nunn (R-Iowa), Mariannette Miller-Meeks (R-Iowa), Brad Finstad (R-Minnesota) and Ashley Hinson (R-Iowa). By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Presiq may boost Brazil's petchems sector
Presiq may boost Brazil's petchems sector
Sao Paulo, 26 June (Argus) — Brazil's proposed special sustainability program for the chemical industry (Presiq), under review in the lower house, marks a strategic shift in the country's industrial policy for the chemical and petrochemical sectors. With the expiration of the special regime for the chemical industry (Reiq) set for 2027, Presiq emerges as a more modern alternative aligned with sustainability and innovation goals. Reiq is a fiscal incentive mechanism that reduces VAT-like PIS/Pasep and Cofins federal taxes on feedstocks used in chemical and petrochemical production, immediately lowering operational costs for qualifying companies. In contrast, Presiq is a broader industrial policy framework still under discussion, intended to succeed Reiq with a more strategic focus. Unlike Reiq, which focused primarily on tax relief, Presiq introduces a model based on environmental and technological commitments. The concept is straightforward: companies in the sector can access benefits if they allocate part of their resources to sustainable investment such as plant modernization, energy efficiency, emissions reduction and waste management. In addition to maintaining Reiq's tax reductions, Presiq aims to unlock further benefits such as additional tax credits for capacity expansions, access to public financing for innovation and sustainability projects and regulatory support for initiatives aligned with Brazil's reindustrialization and green chemistry priorities. This approach aims not only to revitalize the industry but also to reposition it within a global context that increasingly demands environmental responsibility. Brazil's chemical industry currently operates at around 60pc of its installed capacity, the lowest level since the 1990s. A lack of investment, outdated technology and competition from imports have eroded the sector's competitiveness. Analysts consider Presiq to be a critical tool to reverse this trend. By encouraging modernization and innovation, the program could unlock a new growth cycle, with gains in productivity, sustainability and value creation. Braskem, the country's largest petrochemical company, has expressed support for the program and announced investments in its Rio de Janeiro facility. The company plans to replace naphtha — its traditional and costly feedstock — with ethane derived from Brazil's pre-salt gas reserves, which is both cheaper and cleaner. This strategic shift, expected to be supported by Presiq funds, represents a move toward cleaner and more competitive production. Braskem's new leadership under chief executive Roberto Ramos signals a broader restructuring effort. The company aims to recover market value and become more attractive for a potential sale, while maintaining controlling company Novonor, formerly known as Odebrecht, as a shareholder. Diversifying feedstock sources, including importing gas from Argentina's Vaca Muerta shale formation, is part of a strategy to reduce costs and improve efficiency. Presiq also complements recent government efforts to protect the domestic market. Import tariffs on certain chemical products have been raised to 20pc from 12.6pc and anti-dumping duties on US-origin PVC have jumped to 43.7pc from 8.2pc. While these measures aim to curb foreign competition and support local producers, Brazil's domestic output still falls short of meeting demand. As a result, imports are likely to continue, albeit from alternative sources such as Egypt, Argentina and Colombia. Despite a challenging global environment, marked by overcapacity and lower prices, Brazil's polymers market shows signs of resilience. Domestic demand continues to grow, albeit modestly, suggesting underlying strength in the sector and the broader economy. Without macroeconomic constraints such as high interest rates — currently at 15pc in Brazil — consumption could be even stronger. In this context, Presiq stands out as a key catalyst. If successfully implemented, the program could stimulate investment in new production capacity, making it more modern, cleaner and better managed. While no vote date for the Presiq bill has been scheduled, it could advance without a full floor vote unless formally challenged, positioning it as a key step toward a more strategic and sustainability-driven industrial policy. By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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