Biodiesel, Biofuels, Clean Energy, Korea, Oil, Transportation

Korean Biodiesel Market Crowded

December 17, 2007 (The Korea Times) – Use of biodiesel remains quite low at home. But the domestic biodiesel market seems to have reached saturation point already as demand fails to follow supply despite government efforts to increase the production and use of the alternative energy. South Korea has an annual production capacity of some 800,000 tons at the moment. But the demand is expected to remain at less than one-fourth of the supply, according to the Ministry of Commerce, Industry and Energy Monday.

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Biodiesel is a diesel-equivalent fuel derived from biological sources such as vegetable oil, which could be used in unmodified diesel-engine vehicles. It is thus distinguished from the straight vegetable oils or waste vegetable oils used as fuels in some diesel vehicles.

Largely made from soybean oil, rapeseed oil and rice bran, the biodiesel fuel constitutes one of the two axes of biofuel along with the ethanol, which is made from feedstock with a relatively large amount of starch and sugar contents such as corn and sugar cane.

In a mid- and long-term roadmap to activate the production and use of alternative energy sources, the government decided to raise the proportion of biodiesel fuel with conventional diesel fuel by 0.5 percent every year to 2 percent in 2010.

“Under the government guideline, the domestic biodiesel market is set to expand to 180,000 tons next year from the current 90,000 tons,” a ministry official said. “But the demand is far below the current supply of 800,000 tons.”

Unfortunately for suppliers, the imbalance in supply and demand is leading to cutthroat competition. Currently, there are about 20 biodiesel companies registered with the ministry. But only eight of them have so far been chosen as the suppliers of major refiners.

SK Energy and GS Caltex would soon select their biodiesel suppliers for next year. But they do not have any plan to increase the number of official suppliers, according to company officials.

Moreover, several new players including Namhae Chemical, Unid, TKM Biodiesel Korea and Natural Energy are set to jump into the market in the first half of next year, heralding yet more fierce competition.

“We saw only two biodiesel firms in 2002, when the alternative energy was supplied on a trial basis. But other companies sprang up like mushrooms in the past couple of years,” the ministry official said. “We could face new problems unless the imbalance is tackled now.”

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6 thoughts on “Korean Biodiesel Market Crowded

  1. I just recently attended the International ENergy Week in Singapore (November 3-7,2008) held at the Raffles City Convention Centre, as organized by the Energy Market Authority and Energy Studies Institute & Bang’s Public Relations.Major issues on biofuel since it competes for agricultural lands and significant requirement for water consumption(pls note that water uses a lot of energy too for both desalination, filtration, distribution, etc.). Thus, our company, Energy Source Consulting with various partners from all over the world is bringing in the technology to increase yield and efficiency of existing Jathropa and other agricultural stock used for biodiesel. Hope we can help individuals, corporations and countries to be more competitive in biodiesel production and give them consulting on Marketing , Business Dev’t, etc.. Furthermore, we provide advanced technologies on biofuel production like cellulose tech & other complementary technologies like wind tech, hydro, hydrogen,biomass, etc. Therefore, we access the best alternative sources of energy based on natural resource,etc. that varies per country (comparative advantage)–www.energysourceconsulting.com ; e-mail: energysourceconsulting@live.com.sg

  2. interested in biodiesel technology as egyptian government began to give more attention of this matter in the recent time.
    As we are a private company located in cairo under the name of : Modern Engineering Group”meg” .. with strong business relations with most of both private and public sectors in Egypt , so, we are very interested to take part of this career .
    We are looking forward for a successful cooperation through representation agreements
    Best Regards,
    Modern Engineering Group”MEG”
    Mostafa Zakaria Abdul megid
    Chairman

    • We manufacture modular, scalable and affordable biodiesel plants and waste to energy (CHP – Combined Heat and Power) plants.

      Please contact us if interested.

      Riccardo P. Coles
      Managing Director

  3. A.Rahman says:

    Bro. Mostafa, could you contact me at my email regarding biodiesel business. I am representing a biodiesel manufacturer in Malaysia. Looking for bigger market.

  4. chumroen benchavitvilai says:

    Using the BDF (B100) to blend with the mineral Diesel in Korea must be mandated by the government.

    The cost of BDF will be much more expensive than the Mineral Diesel at any stages in the past ,Now and future.

    GOK(Governemnt of Korea) should have not only the clear blending policy but also the significant subsides to make the BDF production in Korea economically viable.

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