Biodiesel Development

Research and development of biodiesel first began in the 1970’s when the United States, France and Italy set up specialized institutions dedicated to research in this field. In the 1990’s, as environmental protection concerns attracted greater awareness globally, governments worldwide began to adopt preferential policies to support uses of alternative and renewable energy sources. As a direct beneficiary of such initiatives, biodiesel began receiving greater attention from regulators and industry participants.

Below is a summary of development for the United States and the European Union:


Europe leads the world in the development of biodiesel and enjoys greater legislative backing, more distributors’ support and stronger end user acceptance than other regions in the world. As part of the Kyoto Agreement, the European Union (EU) committed to reducing its emission of carbon dioxide by 8% between 2008 and 2012. As biodiesel produces about 50% less carbon dioxide than petroleumbased diesel, there is an incentive for individual governments and the European Commission to support the development of the biodiesel market.

The European biodiesel market has expanded rapidly since 2001 and its consumption of biodiesel grew from 1.2 million tons in 2001 to 1.9 million tons in 2004. Revenue from the sale of biodiesel in 2004 was Euro1.51 billion.

Germany, France and Italy are the leading biodiesel producers in Europe by capacity.Other

European biodiesel producers include Estonia, Slovenia, Hungary, Lithuania, Latvia, Malta, Cyprus and Ireland. By 2011, biodiesel consumption is expected to reach 9.9 million tons in the European Union.

United States

The National Biodiesel Board of the United States estimates that there are currently 65 companies that have invested in the manufacturing and marketing of biodiesel. The annual production capacity from these companies is 395 million gallons per year (approximately 1.3 million tons per year).

These market estimates are based on the projections by the National Biodiesel Board of the United States for domestic production and public announcements of the known import volumes over the period (totaling 268,000 gallons (approximately 878 tons) of biodiesel in 2005, 45 million gallons (approximately 147,406 tons) in 2006 and 100 million gallons (approximately 327,569 tons) in 2007).

Typical Biodiesel Feedstock for Foreign Biodiesel Manufacturers

Typically feedstock costs account for approximately 80% of the wholesale cost of biodiesel in the United States and Europe. Globally, between 90% and 95% of the feedstock used to produce biodiesel is derived from high value vegetable oils, primarily food grade rapeseed (canola) oil and soybean oil. The predominant use of high value vegetable oils as feedstocks in large part is due to the abundant supply of food grade rapeseed and soybean in the European Union, the major market for biodiesel, and their significance to the region’s agricultural income.

Note : data source: National Biodiesel Board of the United States, Frost & Sullivan.

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