The UK exported a record volume of biodiesel in 2021, more than the previous eight years combined, amid a drop in Chinese used cooking oil methyl ester (Ucome) shipments to the EU and a growth in domestic ethanol consumption.
Total UK biodiesel exports came in at just under 368,000t for the year, up sharply from 44,000t in 2020, with EU buyers taking nearly all of this volume, according to data from Eurostat. Data for December 2021 is preliminary.
A fall in UK diesel demand amid Covid-19 restrictions but growing ethanol demand in line with the introduction of E10 dented overall biodiesel blending demand, while strong imports from China — primarily comprised of Ucome — led to surplus supply, with EU buyers eager to source more Ucome amid a shortage on the continent.
The UK imported 90,000t of biodiesel from China in 2021, up from less than 18,000t the previous year. But overall shipments from China to the EU 27 in the year fell to less than 367,000t from 822,000t in 2020, limited by bottlenecks at Chinese ports and production facilities amid stringent Covid 19 containment measures.
UK road fuel consumption data released at the end of December showed that the share of biodiesel in the country's biofuel blending mix had fallen to just under 61pc in the third quarter from 74pc in the first quarter, while ethanol's share reached 39pc versus 26pc in the first quarter.
Overall biodiesel consumption fell 100,000t year-on-year to 275,000t in July-September, but rose by 26,500t to 159,500t for ethanol.
The UK rolled out E10 — incorporating up to 10pc ethanol — as the standard gasoline grade at filling stations in England, Scotland and Wales in September 2021, with a deadline of 1 November set for a full switch to E10, bringing it in line with a number of EU member states. This caused demand for ethanol to rise despite overall biofuel consumption falling as Covid containment measures continued throughout the year.
Blending demand for Ucome not only in the UK, but in major EU demand centres such as the Netherlands and Germany, remained much stronger than other biodiesel blends owing to double counting incentives and high emissions savings, with buyers eager to source supply amid a fall in volumes from key exporters such as China.
A lot of the shipments from the UK to the EU in 2021 were Ucome rather than other varieties of biodiesel, several market participants told Argus.
With offers for UCO and Ucome from China higher in value this year, EU buyers may continue to seek out alternative supplies for both, participants suggested. But with UK road fuel likely to increase following the lifting of Covid-containment measures, buyers may be pushed into looking further afield for supply.
