Growth in global biodiesel production is starting to weaken after being strong for years, Hamburg-based oilseeds analysts Oil World said on Tuesday. "The growth dynamics have been lost in July/December 2012, when many important producers reduced their output of biodiesel," Oil World said. "This is true primarily for Argentina and the United States but also to a smaller extent for Brazil and the European Union."
Global calendar-year 2012 biodiesel production will still rise by 0.9 million tonnes on the year to 22.92 million tonnes, the firm forecast. But this rise would be down strongly from the 3.7 million tonne increase in 2011 and the average 2.9 million tonne rise in the previous five years.
Record high soyabean prices this summer, due to poor US and South American crops, have reduced the attractiveness of soyaoil-based biodiesel, Oil World said. Also the European Commission, in a major policy shift in September, said it planned to limit food crop-based biofuels to 5 percent of consumption after criticism that biofuel output was responsible for rising global food prices. European biofuel producers say this could devastate their business and bring an end to production of biodiesel from rapeseed in Europe.
EU 2012 biodiesel output will fall to 9.0 million tonnes from 9.13 million in 2011, ending a long period of growth, Oil World said. US 2012 biodiesel production will still rise to 3.48 million tonnes from 3.29 million tonnes in 2011, but July/December 2012 output is likely to fall by 0.36 million tonnes on the year, and the outlook for 2013 is not positive, it said. "Given the shortage of US soyaoil supplies in 2012/13, it will be difficult to bring biodiesel production to the required level," it said. Argentina's 2012 output will rise to 2.45 million tonnes from 2.43 million in 2011, it said, but this will be down from a 0.6 million tonne increase in 2011.