Oleochemicals
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Latest oleochemical news
Browse the latest market moving news on the global oleochemical industry.
PKO insufficient for EU market under EUDR
PKO insufficient for EU market under EUDR
London, 8 November (Argus) — The European oleochemical market will have insufficient palm kernel oil (PKO) supply under the EU Deforestation Regulation (EUDR), delegates heard today at the 20th Indonesian Palm Oil Conference and 2025 Price Outlook (IPOC 2024) in Nusa Dua, Bali. The cost of compliance with the EUDR will tighten PKO supply for EU markets as fewer palm oil producers are expected to comply with the regulation, further increasing prices into the EU bloc, according to Glenauk Economics managing director Julian McGill. Additionally, an excessive investment in fatty alcohols production in Indonesia will limit the country's exports, further tightening global supply, according to McGill. Indonesia currently consumes 70pc of its PKO production, McGill said. The EUDR requires mandatory due diligence from operators and trading firms selling and importing palm oil and its derivatives into the EU bloc, including PKO. Firms must ensure that products sold in the EU have not contributed to deforestation or forest degradation. Although the regulation is originally expected to take effect from 1 January 2025, the European Commission recently proposed an extra 12 months "phasing-in time" for implementation, which will be voted on by the EU parliament, probably on 14 November. But "the problem with the EUDR will not be solved by postponing the regulation, as European demand for PKO will remain excessive compared to that for palm oil," Julian McGill said during the conference. To fulfil European demand for PKO, producers will have to generate more EUDR compliant palm oil than actually needed, according to McGill. The average yield of PKO from fresh palm oil fruit bunches is 2-5pc. McGill also highlighted that another important problem to be solved for the EUDR to be correctly implemented is the complexity of traceability requirements for palm and palm kernel oil, because they are liquid goods, unlike wood, coffee and cocoa beans. By Carolina A. Palma Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Malaysia's 2025 budget promotes palm waste SAF
Malaysia's 2025 budget promotes palm waste SAF
Singapore, 21 October (Argus) — Malaysia's state-owned Petronas will work with palm oil producers to develop palm oil waste-based sustainable aviation fuel (SAF), according to prime minister Anwar Ibrahim when he presented the 2025 budget. The palm oil producers include Malaysia-based agribusiness FGV and Malaysia-headquartered SD Guthrie, previously Sime Darby. Anwar also announced additional higher tax brackets for crude palm oil (CPO) exports will be introduced from 1 November and proposed to increase Malaysia's windfall profit levy threshold for the palm sector. These changes are meant to ensure domestic CPO supply and encourage domestic production of value-added products including SAF and biodiesel, according to the Budget documents. Progressive export duties will be introduced from 8.5pc when CPO prices rise above 3,600 ringgit/t ($837/t), up to a maximum 10pc for CPO prices above 4,050 ringgit/t. Previous duty rates capped out at 8pc for CPO prices above 3,450 ringgit/t. This revised export structure is likely to weigh on palm oil prices, as exporters may reduce bids in the domestic market to keep prices below the threshold that will trigger higher export duties. The CPO price threshold for triggering Malaysia's windfall profit levy will be increased to 3,150 ringgit/t for Peninsular Malaysia and 3,650 ringgit/t for Sabah and Sarawak from 1 January 2025, a rise of 150 ringgit/t from the previous threshold for both areas. The windfall profit levy applies to producers of palm fresh fruit bunches (FFB). The revised export taxes and windfall profit levy threshold are expected to increase costs for the palm plantation sector, but would help the downstream palm refining industry become more competitive compared with Indonesia, according to industry consultancy Glenauk Economics. Replanting funds Malaysia will also allocate another 100mn ringgit to incentivise smallholders to continue replanting unproductive, ageing oil palm trees under its 2025 budget, the same amount from the previous year. The funding will be 50pc in grants and 50pc in soft loans, as in Budget 2024. No land area target for replanting was specified this year. But this year's allocated funding of 100mn ringgit mirrored last year's allocation that targeted 5,900 hectares (ha) of land area. But this amount will likely not be enough to support adequate replanting, according to market participants. Malaysia replanted an estimated 1.7pc of mature oil palm plantation areas during January-September and 2.6pc of mature areas in 2023, according to data from Glenauk Economics. This indicates more funding is likely needed to meet the 4pc industry standard for replanting mature areas yearly as recommended to maintain palm oil output volumes. The low replanting rate has likely partly been because of high palm oil prices in recent years compared to the historical average. High prices discourage voluntary replanting as plantation owners prefer to continue harvesting FFB from older trees over replanting. Third-month crude palm oil (CPO) futures on Bursa Malaysia averaged 3,890 ringgit/t over the past two years up to 21 October. The average price recorded over the past 10 years was just 3,124 ringgit/t. The US department of agriculture (USDA) estimated a quarter of planted oil palm areas in Malaysia were older than 25 years old as of early January, resulting in lower yields. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Argent to start production at new glycerine refinery
Argent to start production at new glycerine refinery
London, 3 October (Argus) — Biofuels producer Argent Energy is expected to commence production at its new glycerine refinery in early October, a source told Argus . The new Argent refinery, which is located at its Port of Amsterdam site, is Europe's largest facility dedicated to producing bio-based, technical-grade refined glycerine. The facility has a production capacity of 50,000 t/yr and will upgrade crude glycerine into 99.7pc technical-grade glycerine to supply the European chemical market, the company said. Technical-grade refined glycerine can be used in the production of epichlorohydrin, polyether polyol and anti-freeze, among other applications. Additionally, its use as a feedstock for biofuels generation, such as marine fuels, is being studied as it could offer a cheaper alternative to LNG and distillates. The Netherlands has the largest marine fuel sector in the EU. "Our entrance into the chemical market is driven by our goal to maximise product value and support the circular economy. By upgrading glycerine from our processes into a technical-grade product, we're giving the chemical industry a bio-based option they can confidently use in their own products," Argent Energy chief executive Louise Calviou said. The glycerine produced in Argent's new facility will be made via the biodiesel production route, with the product being certified under International Sustainability and Carbon Certification (ISCC) guidelines. Argent Energy currently has a capacity of 190,000 t/yr for waste-based biodiesel, with sites in Amsterdam and northwest England. The company plans to soon triple biofuel production at its Amsterdam site alone. By George Barsted and Carolina A. Palma Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Swedish TOFA exports to US at record in 1H
Swedish TOFA exports to US at record in 1H
London, 18 September (Argus) — Sweden's tall oil fatty acids (TOFA) exports to the US rose to an all-time high in the first half of 2024 owing to tighter US domestic supplies. Swedish TOFA supply to the US totalled 9,960t from January to June this year, Global Trade Tracker (GTT) data show, the highest since the start of the dataset in 2015. Sweden, a key European TOFA supplier, sent 3,196t to the US in January, 3,364t in April and 3,080t in June, and some marginal amounts in February, March and May, according to the GTT data. US crude tall oil (CTO) feedstock refining capacity declined this year, limiting TOFA output. US specialty chemicals producer Ingevity shut down a CTO fractionation facility in DeRidder, Louisiana, earlier this year and converted its Crossett, Arkansas, site to run 100pc on non-tall oil feedstocks in 2023. These reduced US CTO refining capacity by around 30pc and shortened local TOFA supply, market sources said. Reduced US TOFA supply has encouraged local buyers to seek alternatives, including importing from countries like Finland. A Finnish supplier has sent some to the US and is considering sending more in the coming months. TOFA is a fraction obtained by the distilling of CTO and can be used into alkyd resins, coatings, dimer acids, fuel additives, lubricants, oilfield chemicals, and biofuels, among other applications. By Leonardo Siqueira Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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