Biofuel Market Influenced by National Policies... Slow Growth Despite Mandatory Blending Implementation

[Asia Economy Reporter Hwang Yoon-joo] The European Union (EU) has mandated that at least 14% of transportation energy consumption be derived from biofuels by 2030, but actual biofuel production and consumption are expected to increase gradually.

According to the Korea Petroleum Association, global ethanol production is projected to rise from 122 billion liters last year to 143 billion liters by 2028.

The anticipated increase in biofuel production, including ethanol, is influenced by the EU's biofuel policy roadmap. The EU announced the 'Biofuel Policy Roadmap,' requiring that 10% of transportation energy consumption be from biofuels by 2020. Furthermore, the plan aims to raise this ratio to 14% by 2030. However, grain-based biofuels are regulated not to exceed 7% of total transportation energy.

Currently, Brazil is the only country where biofuels account for more than 10% of transportation energy. Consequently, Brazil is also expected to see the largest increase in ethanol consumption and production.

Previously, the Brazilian government announced the 'RenovaBio' policy in 2018 to foster the biofuel industry and reduce dependence on petroleum. Alongside government policies, Brazil is one of the countries where dual-fuel vehicles, capable of running on either gasoline or E100 (100% hydrous ethanol), are widely used.

China also announced a policy to mandate a 10% ethanol blend (E10) in gasoline by 2020. However, the actual ethanol blending rate is only 4%. The energy industry anticipates that if this policy is properly implemented, China's ethanol consumption will more than double over the next decade.

The Korea Petroleum Association stated, "The development of the biofuel market will largely depend on national-level policy support," and predicted that "biofuel prices will effectively decrease in relation to trends in raw materials and crude oil."

This content was produced with the assistance of AI translation services.