ROTTERDAM (Sept 10): The growing demand for sustainable aviation fuel (SAF) has raised the question of how biodiesel and hydrotreated vegetable oil (HVO) will be affected amid the electric vehicle revolution, said industry analyst Thomas Mielke.

He said a reliable and sustainable supply of feedstocks — ranging from cooking oil and plant oils to municipal waste, waste gases, and agricultural residues — is crucial for SAF production.

The insufficient growth in global supplies of used cooking oil, tallow/grease and other non-food feedstocks in the coming years will maintain a high dependency on palm oil, soybean oil, and rapeseed oil as feedstocks for biofuel production, he said at the Sustainable Vegetable Oils Conference (SVOC) here on Tuesday.

SAF is an alternative fuel made from non-petroleum feedstocks that reduces emissions from air transportation. It can be blended at different levels with limits of between 10% and 50%, depending on the feedstock and how the fuel is produced.

“At the moment, 20% of the total world consumption of oils and fats is absorbed by the energy sector. SAF will be another major challenge on the demand side, raising the question of how biodiesel and HVO will be affected with the rise of electric cars and other factors,” said Mielke.

“We have seen the total biodiesel production virtually doubled in the past 10 years. For this year, (biodiesel) production is estimated to reach 62.7 million tons compared with 59.3 million tons in 2023,” said the editor and chief executive officer of ISTA Mielke GmbH (Oil World).

Apart from that, Mielke said there could be a shift in the global vegetable oil landscape, with a growing reliance on soybean, sunflower and rapeseed as alternatives to palm oil.

Palm oil, which is used in everything from lipstick to cooking oil, has lost its growth dynamics due to challenges such as a lack of replanting, insufficient supplies of seedlings, sustainability and certification issues, rising production costs, and a slowdown in new plantings.

“Palm oil production has fallen sizeably below trend already since 2019. There has been an alarming decline in average yields.... (This) will raise global dependence on soybean, sunseed and rapeseed.

“Future plant breeding will focus more on raising the oil content, because of the supply problems of palm oil as well as increasing demand for food and biofuels, including SAF,” said Mielke.

He added: “Consumers and producers of vegetable oils will have to prepare for tightening supplies and higher prices. The world market is moving into a global production deficit of vegetable oils. Widening price premium vis-a-vis fossil fuels will be an important swing factor to watch, potentially curbing usage and production of biodisel/HVO below potential.”

Mielke was among the speakers at the third SVOC event, hosted by the Council of Palm Oil Producing Countries, the Indonesian Oil Palm Plantations Fund Management Agency and the Netherlands Oils and Fats Industry.