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Corn+Soybean Digest

U.S. Versus The World: In Europe, biodiesel's king. In Brazil, ethanol rules.

Biodiesel is old news to German farmers — really old. Germany, as well as a big portion of the European Union (EU), has been pumping biodiesel for a long while.

“Clearly, they are six to 10 years ahead of us on production and use,” says Krysta Harden, American Soybean Association's Washington representative. “But, we may be catching up soon.”

Unlike the U.S., 35-40% of Europeans drive diesel cars. And many of those are fueled by B100 or a biodiesel blend.

In 1991, Germany — by far the largest user — burned 200 million gallons of biodiesel. Last year, they pumped 500 million gallons. Estimates are that they'll hit 750 million gallons this year.

“Germany uses B100 to qualify for tax breaks,” explains Mike Livergood, Archer Daniels Midland's specialist on fuels and industrial uses for oils. “The rest of the EU countries are using 2-5% blends.”

Livergood says that each EU country has a different system with different production credits and regulations that affect biodiesel. “But, the EU Commission is working on a way to standardize their rules,” he says.

“They're (EU) looking at tax bills that mirror what we're trying to do here in the U.S. with the renewable fuels standard,” adds Bob Metz, chairman of the National Biodiesel Board.

Most of the EU's oil used in producing biodiesel is processed from rapeseed, produced on about 1.5 million hectares (3.7 million acres). Some soybean oil is blended in, too, says Livergood.

In a smaller way, Malaysia and Indonesia are also players in the biodiesel market by using palm oil in their production.

The other biofuel, ethanol, is not a big seller in the EU. “They just don't have the feedstocks (corn) to produce it,” Livergood reports.

On the flip side, Brazil uses some biodiesel, but ethanol rules the renewable fuels roost. “Brazil is the only country that's producing a major amount of ethanol and the only real competitor for the U.S.,” says Mike Bryan, BBI International. “At times, they even import ethanol from the U.S.”

In Brazil, ethanol is produced primarily from sugar cane, not corn.

According to the Renewable Fuels Association, about 40% of the cars in Brazil operate on 100% ethanol. The remaining cars run on a blend of 22% ethanol (78% gasoline). Brazil consumes nearly 4 billion gallons of fuel ethanol per year.

The U.S., by comparison, uses ethanol in only 12% of its fuel, mostly at a blend of 10% ethanol (90% gasoline). That translates to 1.7 billion gallons a year.

Bryan claims that Asia is now beginning to show more interest in ethanol production, too. China, for example, has over 900 plants but they produce “tiny” amounts of ethanol and it's used mostly in the beverage and industrial market.

“I can't envision any major competition from another country for U.S. ethanol,” says Bryan. “In the short term, there may even be good potential for the U.S. to export ethanol.”

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