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UK Feb biodiesel consumption soars as ethanol tumbles

London (Platts)--21 Mar 2018 940 am EDT/1340 GMT


UK biodiesel consumption in February jumped 27.5% month on month and 76% year on year to 88 million liters, against a dwindling market share for ethanol, customs data showed Wednesday.

The rise in biodiesel consumption outperformed a 15.1% increase in diesel consumption to 2.542 bullion liters, which was down 3.7% year on year.

That resulted in the biodiesel incorporation rate rising to 3.35% on a volume basis from 3.03% in January and 1.86% in February 2017. Almost all biodiesel used in the UK is double counted, owing to the waste-derived origin of the feedstocks.

In contrast, ethanol consumption dropped 4.8% month on month and 11.9% year on year to 59 million liters in February, as gasoline sales rose 3% month on month to 1.3 billion liters.

That brought the ethanol incorporation rate to 4.3% on a volume basis from 4.7% in January and 4.8% a year earlier.

The increasing biodiesel market share has been driven by improved biodiesel blending economics making it much more competitive than ethanol, but also aided by the double-counting properties of much of the material and the increasing diesel consumption trend.

The UK has a blending mandate for biofuels of 4.75%, but also allows the incorporation of biofuels meeting double-counting specifications.

The government recently decided to raise the Renewable Transport Fuels Obligation to 7.25% starting April 2018, gradually increasing it to 9.75% by 2020 and 12.4% by 2032.

As a result, UK biofuel consumption is set to increase, although there will be a cap for crop-based biofuels at 4% in 2018, which will be incrementally reduced each year to 3% in 2026 and 2% in 2032.

--Chrysa Glystra, chrysa.glystra@spglobal.com

--Edited by Dan Lalor, daniel.lalor@spglobal.com




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