2022 - A year of threats and risks for the biodiesel industry in Spain
The year 2022 has started with a situation of uncertainty and difficulty that can cause great damage to the biodiesel industry in Spain.
There are a series of threats that will drastically reduce production margins and could jeopardise the achievement of the objectives of decarbonisation of transport and the economy.
Supply and "quality" of waste:
The supply chain affected by the effects of COVID 19 during 2021 have increased cost tensions and the quality of supply, with the waste being of poorer "quality" and higher FFA. This makes production more difficult, leads to lower flows and higher energy and chemical consumption, hence lower margins.
Buyers in Portugal
Portugal is a market with a different way of working than the rest of Europe, which puts significant pressure on the price of UCO in Spain, as Portuguese buyers are able to pay much more for the raw material, and 80% of the product in Spain has gone to Portugal in this year 2022. Delivered price level in Portugal (DDP) is higher and unaffordable for Spanish plants and is causing many supply problems.
Energy costs in Spain
Spain is a country dependent on external energy supplies, both gas (mainly Algeria) and electricity (we buy from France what the Spanish sector is unable to produce). The energy transition of closing coal plants and reducing nuclear power has created a major imbalance in the country's energy mix.
In addition, the main operator in the gas market, Naturgy, broke its contracts for 2022 at the end of December 2021, with a large part of the industry taking on much higher cost contracts without the possibility of negotiation. This has led to a 40% increase in the cost of production.
Uncertainty in Spanish biofuels regulation
The Spanish plan to meet its decarbonisation commitments mainly involves electric vehicles, and biofuels need to be considered for a fair energy transition, with technological neutrality and immediate incorporation in order to achieve these objectives.
To this end, Ewaba Spain is part of the "Platform for the promotion of Ecofuels", which brings together a total of 26 associations representing more than 300,000 small, medium and large companies with 4 million workers. This platform is in contact with the authorities to ensure that eco-fuels are taken into account in the objectives proposed by the Spanish government.
Enrique González
President of Ewaba Spain
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