World Grain - October 2008 - 58

BIOFUELS QUARTERLY: E.U. BIODIESEL INDUSTRY FEELS STING OF SUBSIDIES

managed to sustain themselves and even
ﬁnd success. In fact, Petrotec reports that
they have recently increased production.
Historically, most of their transesteriﬁcation has taken place in winter with the
fuel being sold in the summer, meaning
that the fuel had to be stored for long periods of time.
"We have been able to drive up production without having to store fuel...we're
selling it right away as a blend component," Kriegsheim said. Oil companies
have an incentive to blend more volumes
of biodiesel because it is considerably
cheaper than oil.
Kriegsheim conﬁrms that the rising price of rapeseed (canola) oil has
been devastating for producers. Because
Petrotec uses mostly recycled greases in
its process, the company has been able to
avoid some of the feedstock purchasing
pressures associated with virgin oils.
Its production platform is a marketing
strategy for Petrotec. Because biodiesel
made from used oils is much less carbon
heavy, the company uses this as a sales
pitch.
"Yellow grease is in many ways the
most sustainable feedstock," Kriegsheim
said. "It has a good carbon footprint, so
we are able to get a premium price. Big
Oil sees it as a way to fulﬁll their blending requirements in a sustainable way."
Petrotec sold most of its output to oil
companies with interests in the B5 blending market.
"It's a marketing argument for the oil
companies to be able to say that they
are using biodiesel made with nonedible oils in their blending activities,"
Kriegsheim said. "Big Oil has already
started to look at anti-carbon initiatives;
they are going to be forced by law to
diminish their output of VOCS per year
starting very soon."
Even though cheap imports are making it hard for European producers to
compete in their own market, there is an
optimistic forecast concerning production and marketing factors for the coming months.
The trend in oil prices on the German
biodiesel market provided slight relief,

since the price difference between biodiesel
and fossil diesel at ﬁlling stations reached
the 10-eurocent level necessary for sales of
biodiesel in the B100 market.
Petrotec reported that the price per barrel of crude oil WTI fell 20% within the
space of six weeks, a tonne of palm oil
has become 27% cheaper, and the price
of rapeseed oil is down 13%.

"We expect falling price levels for
the remainder of the year," Kriegsheim
WG
said.
Nicholas Zeman is a correspondent for World
Grain and Biofuels Business magazines. He can
be reached at nicholas.zeman@und.edu.
We want to hear from you - Send comments and
inquiries to worldgrain@sosland.com. For reprints of
WG articles, e-mail reprints@sosland.com.

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