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Biodiesel Ethanol Europe

Spain sets out biofuel blend expansion

Spain will hike its biofuels blending mandate to 8.5% by 2020 to keep the country compliant with requirements set out in the EU Renewable Energy Directive (RED), the government announced on Friday.

The blend in 2015 was sitting at around 4.2% through the end of September, which would bring current biodiesel consumption to around 900,000t by the end of this year. Blending will sit little changed at 4.3% for 2016, rising in increments of 1% from a 5% blend in 2017 to reach the 2020 target. The hike in mandate would imply Spanish consumption of agricultural-based biofuels of around 1.5mn t by 2020 assuming a 7% agricultural-based biofuel blend, with another 330,000t of waste-based biofuels to be consumed on top and double counted towards the 10% RED target. In practice consumption of waste-based renewable diesel and first generation biodiesel could substantially trim the overall volumetric blend if Spain opts to introduce a double count mechanism as is expected.

European legislation passed earlier this year restricts consumption of biofuels based on agricultural feedstocks to a 7% share of the overall national blend across the EU, which will leave the remaining 3% of Spain’s blend reliant on waste-based feedstocks which qualify for double count mechanisms, although these have yet to be introduced in Spain.

Other European biofuels laggards will need to make similar announcements if they are to stay on track to meet renewable and carbon reduction targets for road transport fuel set out in the RED and Fuel Quality Directive.

The UK has yet to set out its own roadmap towards the 2020 legislative targets after cutting its mandate back to the current 4.75% blend, which is far smaller in volumetric terms given the large amounts of double count biofuel consumed in the UK. Failure to comply with the targets would leave the UK vulnerable to European legal action and potential fines.

Spain

MS – 04/12/2015

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