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Bio-rich biofuels blends face sales challenge

Petroleum Review; 16/10/2017

A European Commission (EC) study has outlined the difficulties that would be faced in upgrading biofuels in the European Union (EU) from existing common E5, E10 and B7 blends to new bio-rich B10 and E20 blends, writes Keith Nuthall. The report notes that while this would help the EU reduce its carbon emissions, ‘they cannot just replace’ the existing blends, because ‘a large share of the current vehicle fleet is not compatible with these new fuels’.

Indeed, the report says that the current grades will need to remain on sale as ‘protection grades, for many years’, until vehicles that cannot use the new biofuels are phased out. In the meantime, fuel retailers would have to choose between investing in new pumping infrastructure to offer a wider range of blends, replacing an old blend with a new one, or selling old blends only until the new blends become dominant on the market.

And this is no fait accompli. The report noted that retailers have even struggled to sell E10 blends, which have twice as much bio content as E5. In the crucial market of Germany, ‘low consumer acceptance proved to be a significant barrier’, said the report. Only where strong marketing efforts were made, such as in France and Finland, were sales strong. Here, tactics included efforts to list E10 compatible vehicles, clear labelling of pumps supplying the blend and the release of promotional literature. Higher prices for biofuels and also the uncertainties for producers introduced by the EU’s Indirect Land Use Change directive will also impede the sale of bio-rich blends, predicted the report.

News Item details

Journal title: Petroleum Review

Region: Europe

Countries: Europe -

Subjects: Policy and Governance, Economics, business and commerce, Road transport, Biofuels, Energy policy