![]() Brazil, Argentina, Colombia and Indonesia are managing climbing feedstock and biofuel costs by temporarily reducing or delaying blending mandates. Rising prices are slowing biofuels’ growth, but according to our forecast, demand in 2021 nevertheless recovers from the lows seen in 2020 during the Covid-19 crisis. However, over the medium term, major policy discussions in the United States, Europe, India and People’s Republic of China (hereafter ‘China’) hold the promise of a more than doubling of biofuel demand growth in the accelerated case. For example, some governments have responded to the current high price of feedstock by relaxing or delaying biofuel blending mandates, with the effect of reducing demand. 1 The factors influencing biofuel demand are all subject to uncertainty. Policies in the United States and Europe help demand for renewable diesel (also known as hydrogenated vegetable oil in Europe) to nearly triple. The combination of these influences pushes Asian biofuel production past that of Europe during the forecast period. Government policies are the principal driver of the remaining expansion, but other factors such as overall transport fuel demand, costs and specific policy design influence where growth occurs and which fuels grow quickest. The recovery to pre-Covid-19 demand levels accounts for one-fifth of this demand growth. Global demand for biofuels is set to grow by 41 billion litres, or 28%, over 2021-2026 in the main case.
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