European Union: hydrotreated vegetable oil outlook 2030 - SGS INSPIRE Report

This report provides technical, regulatory and market analysis of hydrotreated vegetable oil (HVO) at the EU28 level:

• Chemical and physical characteristics, exhaust emissions and CO2
• Regulatory policy affecting HVO market (taxation, renewable energy share targets, greenhouse gas emission reduction targets)
• HVO market (capacity, consumption and production)
• Demand projection (2020 – 2030)

In 2009, the European Union (EU) approved the Renewable Energy Directive 2009/28/EC (RED I) that became the major driver behind renewable energy consumption in transportation between 2009 and 2020 by setting up the target of 10% share for renewable energy in total energy consumed in the transportation. In December 2018, the EU approved the so-called RED II that set a 14% renewable energy target in transport for the period 2020–2030. It set a 3.5% target for advanced biofuels.

RED has become the major driver behind HVO production and consumption in the transportation sector. Despite the higher price compared to diesel and biodiesel, it has several technical advantages compared to biodiesel.

The future HVO supply will be restricted by the cap on biofuels produced from land-based feedstocks. Nevertheless, there is significant potential for advanced feedstocks (e.g. waste and by-products) for HVO production. Their processing for HVO is better commercialized than their processing for biodiesel.

Projections for HVO demand between 2020 and 2030 are based on the assumption that the EU meets its renewable energy share target in transport. HVO will be largely used in heavy-duty vehicles. We developed a conservative scenario for HVO demand between 2020 and 2030 per different feedstocks, while taking into account the 7 %v/v blending wall for biodiesel and 10 %v/v for bioethanol. 

Content:

1. Executive summary
2. Methodology
3. Technical characteristics
1. Chemical and Physical characteristics
2. Exhaust emissions and carbon dioxide
4. Policy
1. Energy Taxation Directive
1. Diesel and gasoline taxation
2. Biofuels taxation
2. Tax benefits for HVO in Sweden
3. Tax benefits for HVO in Finland
4. HVO price
5. Renewable Energy Directive
1. RED I
2. RED II
6. Fuel Quality Directive
1. Greenhouse gas emission reduction target for fuels in Sweden
7. Effort Sharing Directive and Governance
5. European biofuels market
1. HVO production capacity
2. Co-processed renewable diesel capacity
3. HVO market
1. Future HVO feedstock
4. Biodiesel blending
5. Ethanol blending
6. Projection
1. Baseline scenario