November 5, 2007 (Energy Current) – Asia Pacific’s biodiesel consumption is likely to reach 1.2 million tonnes (1.32 million tons) in 2007, with China, Australia, Indonesia and the Philippines being the largest markets, according to a report by Frost & Sullivan.
Biodiesel production in the region, which previously focused on export markets especially for the European Union (EU), will be increasingly driven by domestic demand, the report, Strategic Analysis of the Asia Pacific Biodiesel Industry, said.
Government mandates and other policies favouring biodiesel use will drive demand to around eight million tonnes (8.8 million tons) by 2013. “The governments of New Zealand, the Philippines and South Korea have introduced blending mandates, either for biofuels as a class or specifically for diesel, which will create a guaranteed market, although the blending percentages are generally low when compared to the EU market,” Frost & Sullivan’s Director of Industrial Technologies Mark Dougan said.
In addition, governments also have granted biodiesel producers incentives, including waivers from corporate taxes, grants or other incentives. In Australia, Thailand and South Korea, where diesel fuel is taxed, some tax benefits have been given to biodiesel producers.
Dougan said biodiesel production in the region will continue to grow despite the rising feedstock costs including hikes in palm oil prices since the third quarter of 2006. Producers in the region will look to low-cost alternatives like waste cooking oil and jatropha, although the available supply remains unclear at the moment, the report said.